April 13, 2011

Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
2

Section 1: Renewal Overview
• 2009
– SISC removed HealthNet as plan offering
– Cabrillo moved to Blue Shield 11/1/09 with lower cost plans for all plan options
– Begins complying with Mental Health Parity
• 2010
– Reviewed plan alternatives to reduce rate increases
• HMO (+15.0% increase) – 7 different plans (from -13.5 decrease to +13.7% increase)
– (High plan +14.5%, Low plan +15.2%)
• PPO (+11.6% increase) – 6 different plans (from +3.5 to +10.6% increase)
– (High plan +11.4%, Medium plan +11.3%, Low plan +12.6%)
– Reviewed contribution structure
• Currently Cabrillo pays 100% of low cost HMO
– Results in 2 plan options that are free for employees
• low cost HMO
• PPO Low plan (HDHP)
• Option 1 - Flat % of premium (90% of all plans)
– Free High Deductible Health Plan => approximately $104,000 savings
• Option 2 - Core / Buy up
– Free High Deductible Health Plan => approximately $134,000 savings
– 6 different plans (from +3.5 to +10.6% increase)
– Conformed to Health Care Reform legislation (unlimited lifetime maximum, dependent to age 26) and retains grandfathered status
– 2010 final result to keep same plans (except for HCR) and contribution structure
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
3

Section 1: Renewal Overview
• Cabrillo College participates in the SISC Medical Plans
– Large not-for-profit JPA managing primarily school medical plans throughout the state
– Established in 1979, SISC administers medical benefits for over 220,000 members
– Multiple HMO and PPO benefit packages available with Blue Shield and Kaiser
– Pooled approach spreads the risk to minimize rate fluctuation
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
4

Section 1: Renewal Overview
BLUE SHIELD (SISC) HMO - HIGH PLAN
October 1, 2010 - September 30, 2011
Exhibit References
HMO Medical Benefits
HIGH Plan
Office Visit
Inpatient Hospital
Emergency Room
Current
HIGH Plan
10-0 w/ MH & IPSA
$10
No charge
$100/visit (waived if admitted)
Annual Maximum
Prescription Drug
Retail
Mail Order
MONTHLY RATES Ees
Single 46
Two Party 24
Family 29
MONTHLY PREMIUM 99
ANNUAL PREMIUM
ANNUAL $ CHANGE from Current
ANNUAL % CHANGE from Current
$1,000/$2,000
$5 / $10 / $25
$10 / $20 / $50
2009 - 2010
$645.00
$1,287.00
$1,779.00
2010-2011
$738.00
$1,476.00
$2,036.00
$112,149
$1,345,788
$128,416
$1,540,992
$195,204
14.50%
Alternative 1
RX Change
$10
No charge
Alternative 2
10 - 0
20-250
$20
$250
Alternative 3
20-250 and RX change
$20
Alternative 4
Current Low
HMO Plan 25-
500 and RX
Change
$25
$250 $500
D
Alternative 5
Plan 25 - 500
Rx Chg Only
$25
$500
C
Alternative 6
30-20%
$30
20%
C & D
Alternative 7
30-20% and Rx
Change
$30
20%
$100/visit (waived if admitted)
$100/visit (waived if admitted)
$100/visit (waived if admitted)
$100/visit
(waived if admitted)
$100/visit
(waived if admitted)
$150/visit
(waived if admitted)
$150/visit
(waived if admitted)
$1,000/$2,000 $1,500/$3,000 $1,500/$3,000 $2,000/$4,000 $2,000/$4,000 $1,500/member $1,500/member
$10 / $20 / $35
$20 / $40 / $70
$727.00
$1,454.00
$2,006.00
$126,512
$1,518,144
$172,356
12.81%
$5 / $10 / $25
$10 / $20 / $50
$681.00
$1,362.00
$1,879.00
$118,505
$1,422,060
$76,272
5.67%
$10 / $20 / $35
$20 / $40 / $70
$670.00
$1,340.00
$1,849.00
$116,601
$1,399,212
$53,424
3.97%
$10 / $20 / $35
$20 / $40 / $70
2010-2011
$619.00
$1,238.00
$1,708.00
$107,718
$1,292,616
-$53,172
-3.95%
$10 / $25 / $40
$20 / $40 / $80
2010-2011
$611.00
$1,222.00
$1,686.00
$106,328
$1,275,936
-$69,852
-5.19%
$5 / $10 / $25
$10 / $20 / $50
2010-2011
$576.00
$1,152.00
$1,589.00
$100,225
$1,202,700
-$143,088
-10.63%
$10 / $25 / $40
$20 / $40 / $80
2010-2011
$557.00
$1,114.00
$1,537.00
$96,931
$1,163,172
-$182,616
-13.57%
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
5

Section 1: Renewal Overview
PPO Medical Benefits - High Plan
Office Visit
Deductible
Prescription Drug
MONTHLY RATES Ees
Single
Two Party
Family
MONTHLY PREMIUM
ANNUAL PREMIUM
ANNUAL $ CHANGE from Current
ANNUAL % CHANGE from Current
79
54
13
146
BLUE SHIELD (SISC) PPO - High and Mid Medical Plans
Alternative SISC PPO Plans
October 1, 2010 - September 30, 2011
Current
PPO Plan E - 90% $10 OV
$10
$300 / $600
$100 Brand Rx Deductible
$5 / $20 Copay
2009 - 2010 2010-2011
$729.00
$1,297.00
$1,986.00
$153,447
$1,841,364
$813.00
$1,445.00
$2,212.00
$171,013
$2,052,156
$210,792
11.45%
Alternative
E 90% $20 OV
Cha
$20 same as current
No Brand Rx Ded
$5 / $20 Copay
2010-2011
#
#
#
$808.00
$1,435.00
$2,190.00
$169,792
$2,037,504
$196,140
10.65%
Alternative
E 90% $20 OV
$20 same as current
No Brand Rx Ded
$7 / $25 Copay
2010-2011
$796.00
$1,414.00
$2,163.00
$167,359
$2,008,308
$166,944
9.07%
PPO Medical Benefits - Mid Plan
Office Visit
Deductible
Prescription Drug
MONTHLY RATES
Single
Two Party
Family
MONTHLY PREMIUM
ANNUAL PREMIUM
ANNUAL $ CHANGE from Current
ANNUAL % CHANGE from Current
Ees
14
10
7
31
Current
PPO Plan G - 80% $10 OV
$10
$500 / $1,000
$100 Brand Rx Deductible
$5 / $20 Copay
2009 - 2010
$662.00
$1,178.00
$1,800.00
$33,648
$403,776
2010-2011
$738.00
$1,311.00
$2,003.00
$37,463
$449,556
$45,780
11.34%
Cha
#
#
#
Alternative
G 80% $20 OV
$20 same as current
No Brand Rx Ded
$7 / $25 Copay
2010-2011
$724.00
$1,286.00
$1,962.00
$36,730
$440,760
$36,984
9.16%
Alternative
G 80% $30 OV
$30 same as current
No Brand Rx Ded
$7 / $25 Copay
2010-2011
$710.00
$1,261.00
$1,923.00
$36,011
$432,132
$28,356
7.02%
Alternative
E 90% $20 OV
$20 same as current
$200 Brand Rx Ded
$10 / $35 Copay
2010-2011
$755.00
$1,344.00
$2,073.00
$159,170
$1,910,040
$68,676
3.73%
Alternative
G 80% $20 OV
$20 same as current
$200 Brand Rx Ded
$10 / $35 Copay
2010-2011
$683.00
$1,216.00
$1,872.00
$34,826
$417,912
$14,136
3.50%
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
6

Section 1: Renewal Overview
– Large JPA started in 1978
– Dental and Vision programs provided – currently administers dental for 250 districts with over 88,000 employees
– Delta Dental network for Dental PPO
– Largest provider network in CA
– Large pool minimizes rate fluctuations
– Rate increase was +1.3%
– No plan alternatives reviewed
– Reviewed contribution structure
• Currently Cabrillo pays 100% of premium
– Option 1 - Cabrillo paying 95% of premium – approximately $41,000 savings
– Option 2 - Flat dollar contribution – approximately $67,000 in savings
• $5 single
• $10 employee + 1 dependent
• $15 employee + family
– 2010 final result to keep same plans and contribution structure
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
7

Section 2: Current Rates & Benefits
Line of Coverage
BLUE SHIELD - HMO Plans
Actives
Retirees
BLUE SHIELD PPO Plans
Actives
Retirees
COMPANION CARE
Companion Care
KAISER PERMANENTE (RETIREE PLAN)
KP (Retiree Plan)
DELTA DENTAL
Active
Retirees
MONTHLY TOTAL
ANNUAL TOTAL
FINANCIAL SUMMARY
October 1, 2010 - September 30, 2011
1
527
101
648
366
23
149
99
10
10/1/2009
$367,291
$17,344
$152,677
$74,880
$4,572
$299
$62,613
$8,805
$688,481
$8,261,774
10/1/2010
$422,389
$19,724
$170,324
$82,085
$5,244
$324
$63,439
$8,921
$772,450
$9,269,403
$ change
$55,098
$2,380
$17,647
$7,205
$672
$25
$826
$116
$83,969
$1,007,628
% change
15.0%
13.7%
11.6%
9.6%
14.7%
8.4%
1.3%
1.3%
12.2%
12.2%
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
8

Section 2: Current Rates & Benefits
BLUE SHIELD HMO - Actives and Retirees
Effective Date: 10/1/2010 - 09/30/2011
Plans
Calendar Year Deductible
Individual / Family
Major Medical
Physician Office Visit
Specialist Visit
Preventive Care
Outpatient Surgery
Hospitalization
Inpatient
Emergency Room
Outpatient Prescription Drugs
(At participating Pharmacies only)
Retail - 30 day supply
Mail order - 90 day supply
No annual deductible
Actives
Employee Only
Employee + 1
Family
Retirees 65+ w/A&B
Employee Only
Employee + 1
Family
Early Retirees
Employee Only
Employee + 1
Family
Total Monthly Premium
Total Annual Premium
Ees
35
16
30
6
0
0
4
2
1
94
Access HMO $10-0
None
$1,000 / $2,000
$10
$10/$30*
$0
No charge
No charge
No charge
$100 (waived if admitted)
$25
$25/$30*
$0
$150 at an Ambulatory Surgery Center;
$300 at a Hospital
$500 / Admit
$100
$100 (waived if admitted)
Generic/Brand/Non-Formulary**
$5 / $10 / $25
$10 / $20 / $50
Generic/Brand/Non-Formulary**
$10 / $20 / $35
$20 / $40 / $70
20% for home self injectables to a max of $100 per prescription
10/1/2010
$738
$1,476
$2,036
$500
$1,000
$0
$738
$1,476
$2,036
$121,466
$1,457,592
2
5
0
295
Ees
133
64
88
3
0
0
Access HMO $25-500 Admit
None
$2,000 / $4,000
10/1/2010
$619
$1,238
$1,708
$452
$904
$0
$619
$1,238
$1,708
$320,647
$3,847,764
Grand total annual premium - HMO 389 $5,305,356
Note: This summary is for informational purpose only. It does not amend, extend, or alter the current policy in any way. In the
* Access + Specialist (self-referred office visits within your medical group are available for higher copay)
** These member payments do not apply to the member calendar year Copayment Maximum
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
9

Section 2: Current Rates & Benefits
SISC - BLUE SHIELD PPO - Active Employees
Effective Date: 10/1/2010 - 09/30/2011
Plans
Calendar Year Deductible(s)
Maximum *Co-Insurance
Services
Office Visits
Inpatient Hospital
Room, Board & Support Services
(prior authorization required)
Ambulatory Surgery Center
Emergency Room (non-emergency)
Facility Expenses:
Professional Expenses:
Preventative Care
Routine Exam
Outpatient Prescription Drugs
Supply
Generic Drugs
Single Source Brand Name Drugs
Multi Source Brand Name Drugs
Brand Name Calendar Year Deductible
Rates - Actives
Employee Only
Employee + 1
Family
Retirees 65+ w/A&B
Employee Only
Employee + 1
Family
Early Retirees
Employee Only
Employee + 1
Family
Ees
54
34
12
40
8
0
90-E $10, Rx 5-20 w $100 brand deductible
$300 p/ind; $600 p/fam
$600 p/ind; $1,800 per fam
Out of Network In Network
$10; (does not apply to deductible or coinsurance 50% max.)
90%
90%
$100 copay
90%
90%
Ded waived; 100%
Ded waived; 100% Not Covered
Medco Rx plan $5-20 w/$100 brand ded
Retail
30 days
Mail
90 days
$5
$20
$5 + cost diff
90% of eligible expenses
50%
50%
$100 per individual up to $300 per family
10/1/2010
$813
$1,445
$2,212
$492
$984
$1,266
$600 p/day
$350 p/day
$10
$50
$10 + cost diff
Ees
10
12
6
1
0
0
80-G $10, Rx 5-20 w $100 brand deductible
80%
$500 p/ind; $1,000 p/fam
$1,000 p/ind; $3,000 per fam
Out of Network In Network
$10; does not apply to ded or 50% max
$600 p/day
80% $350 p/day
$100 copay
80%
80%
Ded waived; 100%
90% of eligible expenses
50%
50%
Ded waived; 100% Not Covered
Medco Rx plan $5-20 w/$100 brand ded
Retail
30 days
Mail
90 days
$5
$20
$10
$50
$5 + cost diff $10 + cost diff
$100 per individual up to $300 per family
24
21
0
$813
$1,445
$2,212
3
0
0
Total Monthly Premium
Total Annual Premium
193 $196,985
$2,363,820
32
Grand Total Annual Premium - PPO
248
* This is only a brief summary of benefits. For details, limitations and exclusions, please refer to the summary plan descriptions.
10/1/2010
$738
$1,311
$2,003
$488
$976
$1,254
$738
$1,311
$2,003
$37,832
$453,984
$3,028,908
Ees
16
1
4
0
1
0
0
1
0
23
HDHP -B w/HSA Compatibility
90%
$2,500 p/ind; $5,000 p/fam
$5,000 p/ind or $10,000 per fam
In Network Out of Network
50%
90% $600 p/day
90% $350 p/day
90%
90%
Ded waived; 100%
Ded waived; 100%
$100 copay
90% of eligible expenses
50%
50%
Not Covered
Retail
30 days
Mail
90 days
$7
$25
$14
$14
$25 $60
Medical deductible must be met before co-pay applies
10/1/2010
$540
$962
$1,504
$506
$1,012
$1,518
$540
$962
$1,504
$17,592
$211,104
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
10

Section 2: Current Rates & Benefits
SERVICES
Inpatient Hospital (Part A)
Skilled Nursing Facilites
(Must be approved by Medicare)
Deductible (Part B)
Basis of Payment (Part B)
Medical Services (Part B)
Doctor, x-ray, appliances, & ambulance Lab
Physical/Speech Therapy (Part B)
Blood (Part B)
Travel Coverage
(when outside the US for less than 6 consecutive months)
Outpatient Presrciption Drugs
Companion Care - Retiree Plan
Employee Only
Employee + 1
Family
Total Monthly Premium
Total Annual Premium
COMPANION CARE - RETIREE PLAN
Effective Date: 10/1/2010
$155
MEDICARE
2010 Benefits
Pays all but first $1100 for 1st 60 days
Pays all but first $275 a day for the 61st to 90th day
Pays all but $550 a day Lifetime Reserve for 91st to
150th day
Pays nothing after Lifetime Reserve is used
Pays 100% for 1st 20 days
Pays all but $137.50
a day for 21st to 100th day
Pays nothing after 100th day
Part B deductible per year
80% Medicare Approved (MA) charges after Part B deductible
80% MA charges
100% of MA charges
80% MA Charges up to the Medicare annual benefit amount
80% MA charges after 3 pints
Not covered
COMPANION CARE
Based on 2010 Medicare Benefits
Pays $1100
Pays $275 a day
Pays $550 a day
Pays 100% for 151st day to 515th day
Pays nothing
Pays $137.50 a day for 21st to 100th day
Pays nothing after 100th day
Pays $155
20% MA charges including 100% of Medicare Part B deductible
20% MA charges
Pays nothing
20% MA charges up to the Medicare annual benefit amount. (Physical & Speech Therapy Combined)
Pays 1st 3 pints unreplaced blood and 20% MA charges
Pays 80% inpatient hospital, surgery, anestetist and in hospital visits for medically necessary services for 90 days of treatment per lifetime
8
2
0
10
SISC will automatically enroll Companion Care members into Medicare Part D. No additional premium required.
SISC plans are not subject to the 'doughnout hole'.
Prescription drug plan enhanced through Medco Health
* Generic : $7 co-pay for a 30-day supply at a retail pharmacy or $14 co-pay for a 90-day supply through home delivery service
* Brand: $25 co-pay for a 30-day supply at a retail pharmacy or $60 co-pay for a 90-day supply through home delivery service
10/1/2010
$437
$874
$0
$5,244
$62,928
* COMPANION CARE is a Medicare Supplement plan that pays for medically necessary services and procedures that are considered as a Medicare Approved Expense
Cabrillo College – 04/13/2011
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11

Section 2: Current Rates & Benefits
SERVICES
Hospitalization
* Inpatient
* Emergency Room
Skilled Nursing Facility
Physician Services/Basic Health Services
* Office visits
* Consultation, diagnosis, and treatment by a specialist
X-Ray Services
* Includes routine annual mammography
Laboratory Services
Annual Physical Examination
* Includes pap smears
Outpatient Mental Health/20visits
Vision Care
* Examination for eyeglasses
* Glaucoma testing
* Standard frame/lenses every 24 months
Dental Care (DeltaCare)
Hearing Examination
Immunizations
* Includes flu injections and all Medicare approved immunizations
Ambulance
Manual Manipulation of the Spine
Prescription Drugs
* Prescription drugs related to sexual dysfunction
Early Retirees
Employee Only
Total Monthly Premium
Total Annual Premium
KAISER PERMANENTE RETIREE PLAN
Effective Date: 10/1/2010
1
1
$200/Admit
$50 co-pay/waived if admitted
Covered in full for 100 days per benefit period
$10 co-pay per visit
No charge
No charge
$10 co-pay per visit
$10 co-pay per visit
$10 per visit
$10 co-pay per visit
$150 frame and lens allowance every 24 months
Not covered
$10 co-pay per visit
No charge
$20/Trip
$10 co-pay per visit (subject to medical necessity)
$10 co-pay per generic/$20 co-pay per brand name up to $100 day supply at Kaiser pharmacies
50% co-insurance; limited to 27 doses in any 100-day period
10/1/2010
$324
$324
$3,888
Cabrillo College – 04/13/2011
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12

Section 2: Current Rates & Benefits
ACSIG - DELTA DENTAL PPO PLAN OVERVIEW
October 1, 2010 - September 30, 2011
Dental Benefits
Calendar Year Maximum
Calendar Year Deductible
Individual / Family
Diagnostic and Preventive
Oral Exam & X-Rays
Teeth Cleaning
Fluoride Treatment
Space Maintainers
Bitewings
Basic Services & Crowns
Amalgam/Composite Fillings
Periodontics (Gum disease)
Endodontics (Root Canal)
Extractions & Oral Surgrey
Sealants
Crown Repair
Restorative - Inlays and Crowns
Prosthodontics
Orthodontics
Eligible for Benefit
Lifetime Maximum
Dental Accident
Lifetime Maximum
Rate Guarantee
Monthly Rates
Employee Only
Employee + 1 Dependent
Employee + 2 or More Dependents
Monthly Premium
Annual Premium
Grand total annual premium - Dental
Ees
227
149
151
527
Actives
In-Network Out-of-Network
$2,000/Member $2,000/Member
None
70-100%
70-100%
60%
50%
None
70-100%
70-100%
Child(ren) Only
$1,000
628
* If PPO Dentist is used
1
The Unlimited dental benefit has a $2,000 benefit maximum for dental implants
2
Members will receive 50% coverage for Prosthodontics when using a Premier Network Dentist
100%
50%
$1,000/Member
1 Year
10/1/2010
$65.92
$130.03
$192.72
$63,439
$761,268
Ees
54
46
1
101
Retirees
In-Network Out-of-Network
$2,000/Member $2,000/Member
None None
$868,323
70-100%
70-100%
60%
Not Covered
50%
100%
$1,000/Member
1 Year
10/1/2010
$63.76
$115.48
$166.07
$8,921
$107,054
70-100%
70-100%
Cabrillo College – 04/13/2011
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13

Section 3: Renewal Schedule
October 1, 2011 - September 30, 2012
Effective Date Release Date Coverages
MEDICAL
SISC
( Blue Shield HMO, PPO, HDHP)
DENTAL
ACSIG
( Delta Dental PPO)
10/1/2011
10/1/2011
5/13/2011
First week of June
Receipt Date
TBD
TBD
Cabrillo College – 04/13/2011
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14

Section 4: Trend Survey/Rate History
Medical (Actives & Retirees < 65) Segal 2011 Hewitt AON ****
(w/o Rx) w/Rx
Fee-for-Service (FFS)/Indemnity Plans
High-Deductible Health Plans (HDHPs)**
Open-Access Preferred Provide
Organizations
(PPOs/Point-of-Service (POS) Plans ***
12.7%
11.7%
11.0%
12.0%
11.2%
10.6%
N/A
N/A
8.5%
PPOs/POS Plans (with PCP GateKeepers)
Health Maintenance Organizations (HMO's)
11.2%
10.2%
10.8%
10.0%
N/A
9.4%
* Trend projections w ere derived by proportionally blending medical trends and freestanding prescription drug trends.
(w/o Rx)
12.8%
11.1%
10.9%
10.9%
10.8%
** HDHPs are defined as those plans w here the deductible is at least the minumum health savings account (HSA) level required by the Internal Revenue
Service ($1,200 single, $2.400 family in 2011) w/Rx
12.4%
11.0%
10.7%
N/A
10.5%
*** Open-access PPO/POS plans are those that do not require a primary care physician (PCP) gatekeeper referral for specialty services.
**** Tw elve month rating periods beginning betw een July and December 2010; Based on data provided by over sixty leading medical and pharmacy vendors.
Year
SISC PPO
Statewide
Renewals
CalPERS
PERS Choice
PPO Renewal *
2006
2007
2008
2009
2010
2011
Average
6.8%
7.5%
4.8%
0.0%
11.6%
TBD
6.1%
9.4%
12.5%
9.0%
0.0%
2.0%
9.9%
7.1%
* CalPERS PERSChoice renewal figures represent overall statewide figure as published by CalPERS
CA PPO Trend
10.0%
11.0%
10.0%
10.0%
11.0%
12.0%
10.7%
Cabrillo College – 04/13/2011
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15

Section 4: Trend Survey / Rate History
Year
2006-2007
2007-2008
2008-2009
2009-2010*
2010-2011
Average
High Plan
Moved to SISC
17.4%
14.7%
15.5%
14.5%
15.5%
Low Plan
17.6%
14.8%
3.6%
15.2%
12.8%
Year
2006-2007
2007-2008
2008-2009
2009-2010*
2010-2011
Average
* Includes plan changes
High Plan
8.0%
5.4%
5.2%
11.4%
7.5%
Medium Plan
Moved to SISC
10.2%
2.9%
5.3%
11.3%
7.4%
Year
2008-2009
2009-2010
2010-2011
Average
Dental PPO Plan
1.3%
6.1%
1.3%
2.9%
Cabrillo College – 04/13/2011
Low Plan HDHP
16.8%
5.3%
5.0%
12.6%
9.9%
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16

Section 5: Next Steps
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
17

•
•
Comparative effectiveness research tax on self-insured plans
Temporary reinsurance program for early retirees
(ages 55-64) established
•
•
Health Care FSA contributions capped
Medicare Hospital Insurance tax
•
High-cost insurance excise tax
(Cadillac tax) established
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
•
Lifetime dollar limits prohibited
•
Annual dollar limits restricted
•
Dependent child coverage expanded to age
26 (unless employer coverage is available –
•
• applies to grandfathered plans only)
Pre-existing condition exclusions prohibited for dependents under 19 years of age
Cost reporting and rebates effective
•
•
•
•
Long-term care program (CLASS Act)
W-2 reporting for 2011 begins
OTC drugs ineligible for FSA, HSA, HRA
Auto enrollment required (Appears to be effective 3/ 23/ 2010 but compliance is effectively delayed until regulations are issued)
•
•
•
•
•
•
•
•
Annual dollar limits prohibited
Pre-existing condition exclusions prohibited for all enrollees
Dependent child coverage to age 26 even if employer coverage is available
Waiting periods over 90 days no longer permitted
State health insurance exchanges established
Individual and employer mandates effective
Low income premium subsidy in the exchange
Employee “Free-Choice” vouchers for exchange
Cabrillo College – 04/13/2011
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18

•
– 60-Day Advance Notice – If plan sponsor makes any materials modifications to the plan, participants must be notified 60 days in advance of the effective date of the change (3/12)
– Annual FSA Limit will be reduced to $2,400 in 2013
– Automatic Enrollment – Employers with more than 200 “full-time” employees must automatically enroll new full-time employees into a health benefit plan
• Much uncertainty on how to apply terms
• Effective date seems to be 3/23/2010, but until DOL issues regulations, employers are not required to comply
• Regulations expected by 2014
– Pay or Play – Effective 1/1/2014, if an employer covers 50 employees, they must offer “minimum essential coverage” to full-time employees (30 hours) and dependents
• Penalty for not offering coverage is $2,000, or $166.67 a month
• Penalty for not offering coverage that is good enough is $3,000, or $250 a month
• Penalty for an employee having to go to the exchange because their portion for coverage is over 9.5% of household income
• Employer Vouchers for qualified employees under a certain income level
– 90 day limit on eligibility waiting periods
– No pre-existing condition exclusions allowed for any individual (2014)
– W2 Reporting – Employers must report the aggregate cost of employer sponsored coverage on form W-2
• This has been pushed back to 2012 due to lack of IRS guidance on how to calculate
– Form 8928 – Employers must, for the first time, self report group health plan compliance failures, and must pay excise tax when due
– Will the law be repealed?
Cabrillo College – 04/13/2011
Copyright © 2011 Alliant Insurance Services, Inc. Confidential; not for distribution
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