GEORGIA LIFE AND HEALTH DIVISION AICP Presentation 7312009 Tom Carswell COBRA and State Continuation

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GEORGIALIFE AND HEALTH DIVISIONAICP
Presentation 7-31-2009 Tom Carswell COBRA and
State Continuation ARRA SubsidyHB 977 and
Wellness LTC Partnership UpdateSmall Group
Pooling, Rating Rule Changes Med Supplement Rule
Changes SERFF Filing Mandate Oct 1, 2009and
more
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COBRA, State Continuation and ARRA Subsidy

• COBRA Stimulus and ARRA
• Help from Illinois Department in March
• US DOL Guidance and Sample Notices
• Senate Bill 94
• GA DOI Notices drafted for Industry
• 9 months total state continuation now available
  for some
• Second election assistance eligibles

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COBRA, State Continuation and ARRA Subsidy

• Differences Federal COBRA vs. State Continuation
  made things confusing for everyone, beginning at
  end of February, 2009.

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COBRA, State Continuation and ARRA Subsidy

• Differences between federal COBRA and State
  Continuation
• COBRA is Federal Employment Law
• State Continuation is Insurance Law
• COBRA regulated by US Dept of Labor
• State Continuation regulated by OCI thru
  insurers, rather than employers

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COBRA, State Continuation and ARRA Subsidy

• Differences between federal COBRA and State
  Continuation
• Windows of eligibility and other factors
• For when Terminated
• For cause of Termination

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COBRA, State Continuation and ARRA Subsidy

• Differences between federal COBRA and State
  Continuation
• Some differences in independent election/choice
  at loss of coverage in COBRA
• Choice limited to employee/insured first, then
  employee/insured might elect for dependents, but
  dependents dont get to elect if employee/insured
  doesnt in GA State Continuation.

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COBRA, State Continuation and ARRA Subsidy

• Differences between federal COBRA and State
  Continuation
• Differences in actual premium and load
• COBRA can cost 102
• State Continuation can only cost 100 of combined
  employer / employee cost

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COBRA, State Continuation and ARRA Subsidy

• Differences between federal COBRA and State
  Continuation
• In ARRA, differences in who fronts for the
  remaining 65 for Assistance Eligible Individuals
• COBRA Employer Fronts
• State Continuation Insurer Fronts

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COBRA, State Continuation and ARRA Subsidy

• Differences between federal COBRA and State
  Continuation
• Differences in Notice content
• COBRA got US DOL Official Model Notices
• State Continuation got suggested State
  Alternative Models which needed to be customized
  to fit state law (e.g. SB 94 GA)

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COBRA, State Continuation and ARRA Subsidy

• COBRA length of coverage issues and implications
  versus State Continuation potential length.
• Future HIPAA and Conversion bumps in the road ?
• How much impact? Lots of Agent/Employer calls
• Unintended consequences
• Elect and Exhaust continuation to get to next
  guaranteed issue phase (Enhanced Conversion or
  Assignment) ???? What happens if consumer
  quits, even if subsidized on COBRA or State
  Continuation??

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COBRA, State Continuation and ARRA Subsidy

• Special Situations in Timing of Separation,
  Coverage
• While SB94 was waiting to be signed by Gov and
  become effective, many Georgians were running out
  old 3 months state continuation. We heard from
  a few.
• Figuring out where they fit was case by case, due
  to the timing of their layoff, start and end of
  state continuation, etc.

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COBRA, State Continuation and ARRA Subsidy

• COBRA- State Continuation (continued)
• Will or did Medical Providers/ hospitals help
  to patch up coverage for persons confined who
  might be assistance eligible??

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COBRA, State Continuation and ARRA Subsidy

• As we later wrote and posted on OCI Web, not
  every situation was clearly covered by SB94
• Future regulatory concerns may surround checks
  for compliance with offers for HDHP Options,
  where available, and spreading of extra cost of
  continuation experience over all cases. Perhaps
  Market Conduct material.

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HB 977 (2008)Wellness HDHP

• HB 977 was passed in GA in 2008
• What it did was encourage use of HSA / HDHP
  programs in several ways.
• Relaxed PPO differential limits
• Encouraged use of Wellness with HDHP
• Wellness with HDHP could avoid traditional
  problem of rebates or illegal inducements, unfair
  trade practices.

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HB 977 (2008)Wellness HDHP

• Gave small employers potential tax breaks for
  providing qualified coverage
• Gave insurers premium tax relief for HDHP
  coverages sold in connection with qualified HSA
  programs

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HB 977 (2008)Wellness HDHP

• Challenges
• Industry knows it is difficult to balance rewards
  with hope of renewing cases to achieve Wellness
  Program actual realized gains
• This is contrasted with Employer Self-Funded
  Plans where employer gets to keep claims savings
  and longer horizon views.
• Employers need to be careful to avoid illegal
  federal discrimination in group health plan. IRS
  Publication 969 and case laws and rulings.

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HB 977 (2008)Wellness HDHP

• Senator Judson Hill asked Commissioner Oxendine
  to convene a roundtable meeting with a few major
  carriers to discuss HDHP Wellness and insurer
  progress or lack thereof, etc.
• Recent meeting. While one couldnt say documented
  progress was made, there was a good, healthy
  exchange of positions, ideas and frank discussion
  among OCI, Legislator and Industry of need to
  find common ground to work toward preserving
  state solutions in health insurance and care.
• HB 977 Proposed Rules have been drafted and are
  being readied for public hearing on September 9th

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HB 977 (2008)Wellness HDHP

• Rules now proposed by OCI to help advise industry
  and give practical guidance on HDHP and Wellness
  filings
• Wellness plans need to be legally tied to
  evidence of coverage, so that they arent
  outside the contract which leads to unfair
  trade practice of illegal inducement
• Tricky federal area potential for employers

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LTC Partnership GA Update

• LTC Partnership April 2009 was one year
  anniversary of new LTC Partnership Rules in GA
• Agent License training update new Agent License
  Rule will clarify requirements, reciprocity
• Carriers just beginning to report to Feds on
  experience with Partnership sales, claims, etc.
  in standardized fashion

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LTC Partnership Update

• Georgia now has LTC Partnership qualified
  insurers, about 20 of them, with all major LTC
  industry leaders involved here.
• We are seeing lots of advertising campaigns that
  use LTC Partnership to grab attention

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LTC Partnership Update

• Inter-Agency cooperation has been good in
  Georgia, with OCI, DCH and DHR Aging working
  closely together.
• Grant Funds from Robert Wood Johnson Foundation
  have been very helpful in bringing states to
  conferences, sharing of ideas, models and lessons

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LTC Partnership Update

• It remains to be seen whether LTC Partnership
  will ultimately pay off for all states that adopt
  it. Some worry about patterns of migration of
  Seniors and effects of reciprocity.
• Federal changes are being studied on those
  issues.
• We think all agree that private LTC is good and
  helpful to state budgets.

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Small Group Pooling and RatingHealth Status at
Renewal Change

• Rules for Small Group Pooling and Rating will be
  changed soon to remove prohibition on use of
  health status at renewal. Hearing 9-9-2009.
• Removal of prior Rule prohibition means that
  small group health insurers will be able to use
  health status as it affects changes in group
  census and will not be required to penalize a
  small employer if a former impaired employee or
  dependent has left the group. Actuaries need to
  get involved in adjustments for this change.

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Small Group Pooling and RatingHealth Status at
Renewal Change

• No other small group pooling and rating changes
  in the Rule. Still limits for experience,
  industry, etc. Still allowances for small group
  factors, age sex, industry, geography, group
  size, family size, avocation

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Standardized Medicare Supplement Changes

• Medicare Supplement Rule
• Congress and Feds Re-shuffle many Standardized
  Plans in 2010
• MIPPA and GINA Federally required
• NAIC Model adopted in GA by Emergency Rule,
  effective July 1, 2009 to meet federal phase-in
  of staged deadlines.
• Gives insurance industry lead time for filings

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SERFF in GeorgiaLife and Health

• Notice given of move to mandatory SERFF filing
  for Life, Health filings effective October 1,
  2009 and mandatory EFT policy form filing fees
  payment.
• Georgia has gained good experience with SERFF so
  far, with Health filings of all product lines
  accepted in SERFF since December 2008.
• Life accepted in SERFF in some very limited lines
  beginning as far back as 2002, but expanded to
  all life product lines within last 2 years or so.

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SERFF in GeorgiaLife and Health

• On receiving end, for states, SERFF helps in many
  ways, but has some administrative weaknesses for
  many purposes.
• Reporting and data handling flexibility are not
  what they could be for states, and SERFF staff at
  NAIC tries hard, but not all that is desired by
  states can be done in areas like blending SERFF
  filing data into legacy systems.

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Georgia Health Insurance Assignment System

• Georgia has State Alternative Mechanism
• What it is and isnt
• What type of stats do we have after 10 years?
• Total Assignments since 98 5,840
• Estimated number of active Assignees
  2,500
• What is happening at present time, in economy.
• Periodic review of market, benefits and premiums
  needs to be done to go forward and update these
  for fairness for all and federal compliance
• Federal re-evaluation of HIPAA State Alternative
  Mechanism in 2009.

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Interstate Compact

• Georgia has been a part of this for a few years.
• Interstate Compact was needed to help fund SERFF
  expansion and development Not moving forward all
  that fast
• Hard to measure actual coverage impact here in
  Georgia
• Mixed results, standards development appear
  driven by only a few vocal states

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Medicaid CMOs in Georgia

• Compare reported CMO Medicaid premium vs.
  commercial health total premium in GA.
• Medicaid CMO 2008 2.55 Billion
• Commercial AH 11.47 Billion
• Only 3 CMO Contractors are serving the Georgia
  Market, covering just under 1 million Georgians
  in Medicaid.

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Life and Annuities Side of Shop

• In Life and Health Division, Life is quiet,
  relatively speaking
• Economy downturn stifles many product
  innovations, developments.
• We have seen lots of life and annuity
  advertisements, but few new products
• Equity Index federal legal rulings regarding SEC
  oversight and appeals have been interesting

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Your Submitted Questions

• Q  A carrier has a new product that is "outside
  the box," e.g., it does not fit neatly into the
  typical group or individual health categories.
  What steps should the carrier take - prior to or
  at the time of submission to the department -
  that will assist the department in their
  review and make the process more efficient for
  all parties?
• A Brief Ga. Legal basis Good for Consumer?
  Home State or other approvals? Perhaps Visit,
  but provide advance summary materials, first.

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Other Questions

• Ask your questions now, or send them to me, via
  email tcarswell_at_oci.ga.gov or phone (404)
  657-4193
• OCI Website www.gainsurance.org