CVS Caremark Corporation and Walgreens announced on June 18th, 2010 that the companies have reached an agreement on terms under which Walgreens’ retail pharmacies, which include Duane Reade and Happy Harry’s, will continue participating in the CVS Caremark pharmacy benefit management (PBM) national retail network for existing, new and renewal plans. This includes CVS Caremark’s commercial pharmacy network and its Medicare Part D pharmacy network.
On June 9, 2010, Horizon BCBSNJ released Brief Notes Vol. 19, No. 705, indicating that CVS Caremark would be removing Walgreens from its commercial network on July 9, 2010 and its Medicare Part D network on January 1, 2011. The agreement announced today allows CVS Caremark to avoid this action and any disruption to members.
Click here to view Horizon BCBSNJ Brief Notes Vol. 19, No. 706, which includes further details.
Horizon BCBSNJ is Changing NJ Small Group Portfolio
Horizon BCBSNJ has received approval from the New Jersey Department of Banking and Insurance (NJDOBI) to withdraw certain small employer health and prescription drug plans from the marketplace. This change may impact you at your upcoming anniversary date. If you are currently covered by one of these withdrawn plans, you will be required to select a new plan from Horizon BCBSNJ's portfolio as your existing plan will no longer be available and will not be renewed.
In order to deliver products and services more economically and effectively, Horizon BCBSNJ has initiated this effort to simplify its current health and prescription drug product portfolio.
Next steps: Within 60 days of your anniversary date, you will receive their new health and prescription plan rates, based on recommended product(s) that closely match your current plans. Or, you choose other product(s) from Horizon BCBSNJ's small employer portfolio.
If you have any questions or concerns before your anniversary date, please do not hesitate to contact us.
Grandfathered Plans , continued
Additional Requirements for Grandfathered Plans
The regulations also contain additional requirements to keep health plans from using the grandfather rule to avoid providing important consumer protections.
To promote transparency, the regulations require a plan to disclose to consumers, every time it distributes materials, whether the plan believes that it is a grandfathered plan and therefore is not subject to some of the additional consumer protections of the health care reform law. This allows consumers to understand the benefits of staying in a grandfathered plan or switching to a new plan. The plan must also provide contact information for enrollees to have their questions and complaints addressed.
The regulations also provide that a plan’s grandfathered status may be revoked if it forces consumers to switch to another grandfathered plan that, compared to the current plan, has less benefits or higher cost sharing as a means of avoiding new consumer protections. Grandfathered status may also be revoked if a plan is bought by or merges with another plan simply to avoid complying with the law.
PROJECTED IMPACT ON CONSUMERS AND PLANS
The Departments have provided information on the expected impact the grandfathered plan rules will have on health coverage. For additional information, access the fact sheet at: www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html.
Large Employer Plans
It is expected that large employers (100 or more workers) - who make up the vast majority of those with private health insurance today - will not see major changes to their coverage as a result of this regulation. The regulations affirm that most of these plans will remain grandfathered – more than three-quarters of firms in 2011 – based on the way they changed cost sharing from 2008-2009.
Most of these plans already offer the patient protections applied to grandfathered plans such as no pre-existing condition exclusions for children and no rescissions of coverage when a person gets sick. In addition, they are likely to already give their workers and families protections like a choice of OB-GYN and pediatrician, and access to emergency rooms in other states without prior authorization. Based on past patterns of behavior, it is expected that large employers will continue to make adjustments to the health plans they offer from year to year so that, by the time the health insurance Exchanges are established in 2014, fewer – but still most – large employer plans will have grandfather status. However, the assumed market changes depend on the choices large employers make in the future.
Small Business Plans
The roughly 43 million people insured through small businesses will likely transition from their current plan to one with the new protections over the next few years. Small plans tend to make substantial changes to cost sharing, employer contributions, and health insurance issuers more frequently than large plans. As such, it is estimated that 70 percent of plans will be grandfathered in the first year, but depending on the choices these employers make, this could drop to about one-third over several years.
Individual Health Market
The 17 million people who are covered in the individual health insurance market, where switching of plans and substantial changes in coverage are common, are expected to receive the health care reform protections sooner rather than later. Roughly 40 percent to two-thirds of people in individual market policies change plans within a year. Given this “churn,” the transition for the 17 million people in this market may be swift, irrespective of the grandfather plan definition.
Special Types of Health Plans
Fully-insured health plans subject to collective bargaining agreements will be able to maintain their grandfathered status until their agreement terminates. After that point, they are subject to the same rules as other health plans; in other words, they will lose their grandfathered status if they make any of the substantial changes described above. Retiree-only and “excepted health plans” such as dental plans, long-term care insurance, or Medigap, are exempt from the health care reform insurance reforms.