IAM District 15 - Redacted HWM

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ObamaCare waiver request - Patient Protection and Affordable Care Act
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  file:////co-adshare/...20Force/CCIIO%20Waivers%20-%20Torres/DFOI%20Processing%20Team/Mike/IAM%20District%2015/Waiver.htm[10/27/2011 3:12:28 PM] From: Marylou Gartland [marylou.gartland@benserconj.com] Sent: Tuesday, November 30, 2010 3:26 PM To: HHS HealthInsurance (HHS) Subject: Waiver  Attachments: D15 Waiver App 2011.pdf  Thank you.  Marylou Gartland Fund Manager  BENEFIT SERVICES2185 LEMOINE AVEFORT LEE, NJ 07024201-947-8000 marylou.gartland@benserconj.com IAM D15:000001    November 30, 2010James MayhewHHS Office of Consumer Information and Insurance Oversight, Office of OversightRoom 737-F-04200 Independence Ave. SWWashington, DC 20201 Dear Mr. Mayhew:Please accept this application from the IAMAW District 15 Health Fund plan for a waiver fromthe restricted annual limits set forth in the Interim Final Regulations for the plan year January1, 2011  –  December 31, 2011. The plan was offered prior to September 23, 2010. This letter and its attachments include the following information as required by OCIIO Sub-RegulatoryGuidance 2010-1: Process for Obtaining Waivers of the Annual Limits Requirements of PHSAct Section 2711.The plan provides group health benefits to active participants and their dependents. The benefits are self-insured. The Fund is administered by a joint board of employer and uniontrustees and a plan administrator. Participants are offered hospital, medical, prescription drug,dental, optical, and life benefits. In order for a participant to be eligible to have contributionsmade to the Fund on his/her behalf, the participant must work under a collective bargainingagreement, which establishes the contribution amount for the work performed.Eligible active participants are offered prescription drug coverage with an annual maximum of $   for participants in Tier 1, $   for participants in Tier 2, $   for participants inTier 3, and $   for participants in the Local 447 option. Contributing employers makecontributions to the plan for their employees, and the level of coverage in which participantswill be enrolled is determined by the collective bargaining agreement.The plan is requesting a waiver of the annual dollar limits applicable to the various prescriptiondrug plans. Attestation I hereby attest to the following: I am the plan administrator of the IAMAW District 15 HealthFund plan. I certify that (1) the plan was in force prior to September 23, 2010 and (2) theapplication of restricted annual limits to the plan would result in a significant decrease inaccess to benefits for those currently covered by the plan and a significant increase in  premiums paid by the plan’s participants and covered dependents.    ____________________________________  Lucille HartFund Administrator  IAM D15:000002    Annual Dollar Limit Waiver Certification Name of Plan: IAMAW District 15 Health FundPlan Year: January 1, 2011  –  December 31, 2011 The Segal Company has reviewed the Plan’s request for a Waiver of the Restricted Annual Dollar Limits in the Affordable Care Act, and has the following findings.1.   The terms of the plan for which a waiver is sought.Tiers 1, 2 and 3, and Local 447 have a % copayment at both retail and mail witha minimum copay of the lesser of $   or the cost of the drug and a maximum copayof $   The annual benefit maximums for Tiers 1, 2, 3, and Local 447 are $   , $   $   , and $   respectively.We have attached a benefit summary for your reference (all prescription drug plansare the same except for the annual maximums).2.   The number of individuals covered by the plan submitted.active eligible employees and approximately dependents (   membersand approximately dependents are not covered by the prescription drug plans).3.   The annual limit(s) and rates applicable to the plan submitted.The plan currently has the following per person annual maximums on prescriptiondrugs: $   for participants in Tier 1, $   for participants in Tier 2, $   for  participants in Tier 3, and $   for participants in the Local 447 option. The Planis applying for a waiver of the annual limits requirements of PHS Act Section 2711in connection with the aforementioned prescription drug dollar limits. Section 2711would require that these limits be raised to $750,000 in 2011.The Segal Company calculated the estimated January 1, 2011  –  December 31, 2011 premium equivalent that would be generated if the annual limits are removed. “Premium equivalent” is the cost of a self  -insured plan if the plan were insured. IAM D15:000003   Premium EquivalentPrescriptionDrugTotal BenefitExpense2011 Monthly Prescription Drug PremiumEquivalent with annual maximums2011 Monthly Prescription Drug PremiumEquivalent if the annual maximum onPrescription Drugs is increased to $750,000Increase in dollarsIncrease as percent4.   A brief description of why compliance with the interim final regulations would result ina significant decrease in access to benefits for those currently covered by such plans or  policies, or significant increase in premiums paid by those covered by such plans or  policies, along with any supporting documentation.   Complying with the restricted annual dollar limits, i.e., increasing the annual limits to$750,000 for the 2011 plan year would result in a significant decrease in access to benefits for current participants and dependents and/or a significant increase in premiums paid by those covered by the plans, for the following reasons:The additional cost associated with the increase or elimination of the currentmaximums would not be offset by the ability to obtain additional employer contributions due to existing collective bargaining agreements or other employer economic constraints.   The Fund, which is on a fixed income based on collective bargaining agreements,would need to cut essential benefits, shift costs to low wage participants(mechanics, who are the highest paid participants in the Fund, are still fairly low paid) who cannot afford to contribute. Because of the economy, the newer contracts have % increases for years beginning after 10/09 and % as of 10/10.The additional cost associated with the increase or elimination of the current annualmaximums would likely result in material economic hardships that may requireoffsetting reductions in employment or reductions in wages or benefits. For example, prescription drug coinsurance paid by participants would have to increase by at least percentage points (from percent participant coinsurance to over  percent) and the current $   maximum member coinsurance per prescription wouldlikely have to be removed. This would have a disproportionate impact on those participants that use specialty or other high cost drugs, such as those with Mu l  tipleSclerosis, since they would no longer be protected by the co-payment maximum.Their costs would increase exponentially.   Alternatively, members may be required to pay contributions equal to the increasein costs ($    per member per month). Currently participants do not contributetowards the cost of coverage. IAM D15:000004
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