May 3, 2010
Human Resources views new health-care bill
When President Barack Obama signed into law the Patient Protection and Affordable Care Act in March, he made the long-standing possibility of significant health care reform reality. The much-debated bill will expand health care coverage to more than 30 million previously uninsured Americans.
Several provisions of the bill were enacted immediately, such as the Food and Drug Administration’s ability to approve generic versions of biologic drugs, a Medicaid drug rebate increase for brand name drugs and the creation of a nonprofit Patient-Centered Outcomes Research Institute.
For Johns Hopkins employees, the full impact of the bill on their benefits will come several years down the road, although some provisions will impact faculty and staff when the new plan year begins on Jan. 1, 2011, according to Heidi Conway, senior director of benefits and shared services for Human Resources.
Conway said that many of the law’s key provisions will not take effect for two or more years. Notably, the individual coverage mandate that requires every American to have health care coverage won’t start until 2014. (Johns Hopkins employees are already required to have health insurance.) Most individuals who fail to maintain coverage will at that time pay a penalty.
“And it will be some time before we fully understand the longer term impact of this law on the university, our faculty, staff and retirees,” she said. “There may be some modifications as the bill gets implemented.”
In the short term, however, many of the changes required as of Jan. 1 are already part of the university’s health care plan, she said. For example, the law states that preventive care services will be covered at 100 percent, employees must be offered choice when selecting a primary care physician or pediatrician and any pre-existing condition exclusion will be eliminated. These stipulations have been part of the university’s health plan designs for many years.
Conway said that offering high-quality and comprehensive health care coverage at an affordable cost has long been a mantra at Johns Hopkins.
“Our health care package is very substantial and a very important recruitment and retention tool for us, and I don’t see that ever changing,” Conway said. “We offer a plan that compares very favorably to our peer institutions’ and is significantly less expensive in many cases.”
The first health bill–related change JHU employees will notice, Conway said, will come in the form of dependent eligibility. Currently, Johns Hopkins extends dependent coverage to unmarried dependent children up to age 25. The new law states that children will be eligible for coverage through the end of the year in which they turn 26, as long as they do not have access to other coverage through their employers. This provision, which Johns Hopkins will put into effect on July 1, applies even if a child is married, whether or not the child attends school full time or lives with the parent or guardian.
On Jan. 1, lifetime benefit maximums will be removed. The provisions mean that a health plan can’t cap the total amount it may pay in a person’s lifetime. Currently, the only Johns Hopkins option with a lifetime benefit maximum is the EHP Classic Plan.
Another significant new-year change impacts health care flexible spending accounts, which allow the users to save money by deducting tax-free dollars from pay to cover certain health and dependent care expenses incurred during the year. Beginning Jan. 1, employees who use the accounts will be able to use money only for items that are prescribed by a health care provider, or for insulin. Over-the-counter drugs will no longer be covered, and, beginning in 2013, the maximum contribution a person can make to a health care flexible spending account will be $2,500.
Conway said that Human Resources and Johns Hopkins’ federal relations staff will continue to follow the legislative process to analyze any further impact to faculty, staff, retirees and the university.
The university will update employees on these changes through the news section of its Benefits Web site, located at http://benefits.jhu.edu. For any questions, call 410-516-2000.