Topics for Today’s Discussion
Individuals & Families• New Insurance Marketplace starts Oct 1 • Who is Impacted• Getting Ready for Big Changes
Small Businesses• New Market Rules & Requirements • Group Size Matters• Preparing for the Changes
Questions
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3 Big Changes
ACA requires that no one can be denied coverage because of pre-existing conditions
No Pre-Existing Conditions
ACA prohibits health plans from imposing annual or lifetime limits on the amount of coverage an individual receive
No Lifetime or Annual Limits
ACA will not allow insurance companies to charge higher rates based on gender
No Gender Discrimination
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INDIVIDUAL MARKET Changes coming in 2014
Exchange Guarantee Issue
Cost Sharing Help
Medicaid Expansion
Individual Mandate
Tobacco Usage
Rates higher for tobacco users
Tax penalties start at $285 for family of 4
Tax credits and subsidies for those who need it most
No one can be denied coverage for medical reasons
New Health Insurance Marketplace opens Oct. 1
Many states are expanding to 138% of FPL
$
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Health Insurance Marketplace
Exchange
Individual market restricted to open enrollment periods
The First Year
October 1, 2013 Open Enrollment Period Begins
Health Insurance Marketplace ReadyOnline Shopping Experience at www.healthcare.gov (or state URL)
Determine subsidies; enroll in health plan
March 31, 2014 Open Enrollment Ends
Mar-Sept, 2014 You can enroll if you have a qualifying event
Every Year After…
Oct 15-Dec 7 Open Enrollment Season
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Product Standardization
Exchange
All Health Insurance Carriers must offer “Metal” Plan Levels
Bronze Must pay for 60% of actuarial value
Silver Must pay for 70% of actuarial value
Gold Must pay for 80% of actuarial value
Platinum Must pay for 90% of actuarial value
Catastrophic Up to age 30 or exempt from mandate
All limit out-of-pocket expenses
All plans offered must be certified by the Exchange as a Qualified Health Plan and include Essential Health Benefits (10 categories of care that must be covered).
All health plans must include coverage for preventive care like annual physicals, pediatric care, maternity and newborn care
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Cannot be turned down for coverage
Guarantee Issue
Issuers in the individual and group markets
must accept every employer
and individual applying for coverage, or
renewing
Issuers may only use 4 Rating Factors to determine premiums
Rating Area (geography)
Age (3:1 bands)
# People on Plan
Tobacco Usage CoOportunity Health | 4/15/2013 | 8
Tax credits and subsidies for those who need it most
Cost Sharing Help
$100-250% of
Federal Poverty Level250-400% of
Federal Poverty Level
Individual $11,490-$28,725 $28,725-45,960
Family of 4 $23,550-58,875 $58,875-94,200
Help with premiums and cost sharing reduction Help with premiums only
Federal Register, January 24, 2013
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Of those,Will likely be eligible for Federal Premium Assistance tax credit
Individuals/families with incomes between 100% and 400% of the Federal Poverty Level
Subsidy: Individuals pay premiums equal to: 2% of income for those at 100% of FPL rising to 9.5% of income for those at 400% of FPL
19 Million Nationwide
Cost Sharing Help
$
Uninsured
Unemployed
Self employed in individual market now
25 Million 19 Million
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States may expand from 100 to 133% of FPL
Medicaid Expansion
States that expand receive 100% of federal funding for the first 3 years, phasing to 90% in subsequent years.
Gov. Branstad is leaning toward not expanding Medicaid in Iowa.
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Tax penalties
Mandate to Buy
All individuals must maintain “minimum essential coverage” through an employer-sponsored plan or an individual plan.
2014 $95 per uninsured adult, or1% of household income
2015 $325 per uninsured adult, or2% of household income
2016 $695 per uninsured adult, or2.5 % of household income
Total household penalty may not exceed 300% of the adult penalty
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Exceptions
Mandate to Buy
Proposed 10 categories of individuals who are exempt from penalties
1 Individuals not lawfully present in the U.S. (undocumented immigrants)
2 Taxpayers with income below the filing threshold
3Individuals who cannot afford coverage; contributions toward coverage exceed 8% of household income
4 Taxpayers with income under 100% of poverty level (qualify for Medicaid)
5 Individuals who experience short coverage gaps
6 Members of Indian tribes
7 Hardship
8 Religious conscience
9 Incarcerated individuals
10 Members of health care sharing ministry
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Encouraging a Tobacco-free U.S.
Tobacco Usage
Insurance Reforms
Rating factor for tobacco use 1.5:1 (or 50% higher)
Health insurance plans (individual and group) must provide coverage for treatments to help smokers and other tobacco users quit with no out-of-pocket cost
Must provide counseling for pregnant women who smoke with no out-of-pocket cost
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I BUY PRIVATE
INSURANCETODAY
I DON’T HAVE
INSURANCE
I HAVE INSURANCE THROUGH
MY EMPLOYER
Who is impacted by the changes?
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I DON’T HAVE
INSURANCE
Who is impacted by the changes?
UNINSURED POPULATION
YOUNG & INVINCIBLES
LOST EMPLOYER COVERAGE
• In Iowa, 250,000 people are uninsured
• May stay on parent’s plan to age 26
• Looking for affordable options
GO SHOPPING
• May qualify for premium and/or cost-sharing subsidies• Go to Exchange beginning October 1, 2013 to apply• Subject to tax penalties if don’t have coverage
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I BUY PRIVATE
INSURANCETODAY
How do the changes impact you?
TRAPPED INDIVIDUAL OR FAMILY POLICYHOLDERS
• Have had limited options
• May be trapped because of medical underwriting
CURRENTLY ENROLLED IN GRANDFATHERED PLAN
• Plans that existed before March 23, 2010
• Will not be required to include essential health benefits until 2016
GO SHOPPING
• May qualify for premium and/or cost-sharing subsidies• Go to Exchange beginning October 1, 2013 to apply• Or, get a quote for “off Exchange” options• No medical underwriting is a “game changer”
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I HAVE INSURANCE THROUGH
MY EMPLOYER
How do the changes impact you?
COVERED EMPLOYEE & DEPENDENTS
• Can opt out of employer’s coverage if it is unaffordable: more than 9.5% of household income to cover the employee’s share of premium costs
GO SHOPPING
• May qualify for premium and/or cost-sharing subsidies• Go to Exchange beginning October 1, 2013 to
understand available options
TRAPPED EARLY RETIREE
• May have felt unable to retire for fear of having no health insurance
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7 Things Individuals Can Do Now
1 Learn about different types of health insurance
2 Make a list of questions you have before it’s time to choose your health plan
3 Make sure you understand how insurance works, including deductibles, out-of-pocket maximums, copayments, etc.
4 Start gathering basic information about your household income
5 Set your budget
6 Find out from your employer whether they plan to offer health insurance
7 Explore current options; healthcare.gov is a good place to start
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Huge Market Changes for Groups
Small Group (1-50) ImpactsLarge Group (>51) Impacts
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What concerns you most about Healthcare Reform?
?What will it cost?
?How much time will this take to manage?
?When will my employees see a benefit?
?Where can I get information I can trust?
?Who can help make sure we’re prepared?
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GROUP MARKET Changes coming in 2014
Expanded Benefits New Rules SHOP
Exchange
Tax Credits Employer Mandate
New Taxes & Fees
Employer and insurer fees to support new marketplace
Requirements for groups with >50 employees
Expanded tax credits for small groups with 1-25 FTEs
Required coverage categories, levels and amounts
SHOP Exchange for Small Group (1-50)
Rating and market rule changes for small group
$
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Small Group Market (1-50) Plan Requirements
Expanded Benefits
Essential Health Benefits
Out-of-Pocket Maximum
Small Group Deductible Ceiling
Limited to Metal Plans
10 required coverage categories
New accumulation rules and ceiling
$2,000 single/$4,000 family
BronzeSilverGoldPlatinum
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Essential Health Benefits
Expanded Benefits
Essential Health Benefits
Emergency Services Hospitalization Maternity and
Newborn Care
Mental Health and Substance Use Disorder
Services
Prescription Drugs
Rehabilitative & Habilitative Services &
Devices
Laboratory Services
Preventive & Wellness
Services, Chronic Disease
Management
Pediatric Dental & Vision Care
Ambulatory Patient Services
• 10 categories of care must be included in all small group plans• No lifetime limits• No annual dollar limits
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Small Group Market Plans (1-50)
Expanded Benefits
Plans Limited to Metal Plans
Bronze Must pay for 60% of actuarial value
Silver Must pay for 70% of actuarial value
Gold Must pay for 80% of actuarial value
Platinum Must pay for 90% of actuarial value
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▶ Big Changes for Small Groups• Small Groups (1-50) – move to adjusted community rating where ALL
policyholders’ premiums only vary by location, small age bands, and tobacco use
▶ All Group Plans• Removal of pre-existing conditions• Guaranteed issue and renewal coverage• No medical underwriting
Rating and Market Rule Changes
New Rules
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Employer Requirements, SHOP & Tax Credits
1-25 FTEs 26-50 FTEs >51 FTEsInsurance
RequirementNot required to provide health insurance
Not required to provide health insurance
Required to provide health insurance
Penalties Exempt from penalties Exempt from penalties May be penalized whether or not they provide health coverage
Size Requirements
& Programs
Tax Credits• Fewer than 25 FTEs• Pay average annual wages
below $50,000• Contribute 50% or more
toward employee premiums• Up to 50% for “for profit”
firms• Up to 35% for nonprofits
Minimum Value• Insurance plan must provide
“minimum value”• Plan must pay at least 60% of
the cost of services• Plan passes “affordability” test
as long as premium contribution for single coverage does not exceed 9.5% of an employee’s W-2 wages
SHOP Exchange
• Shopping portal for small businesses
• Metal plans offered by private insurance companies
• Increased purchasing power
• Shopping portal for small businesses
• Metal plans offered by private insurance companies
• Increased purchasing power
• Iowa not changing definition yet
• Beginning in 2016, small group definition increases to fewer than 100 FTEs
• SHOP available to employers 1-100 in 2016
Outside Exchange
• May continue to purchase coverage off Exchange
• May continue to purchase coverage off Exchange
• May continue to purchase coverage off Exchange
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Determining Employer Penalties (51+ FTEs)
EMPLOYERS WITH 51 OR MORE EMPLOYEES (FTEs)
DO NOT PROVIDE COVERAGE DO PROVIDE COVERAGEbut the coverage is “unaffordable” or does not provide “minimum value”
TriggerAt least one employee obtains subsidized coverage from the Exchange
At least one employee receives subsidized coverage from the Exchange
Fee
Must pay a fee equal to $2,000 per year for each full-time (30+ hours) employee minus the first 30 employees
Must pay a fee equal to the lesser of $3,000 for each employee receiving subsidized coverage, or $2,000 for each full-time (30+ hours) employee minus the first 30 employees
Large employers are those with at least 50 full-time equivalent non-seasonal employees. Full-time is an average of 30 hours or more with respect to any month. Seasonal is fewer than 120 days in a calendar year.
Employer Mandate
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Paying to Play in the New Insurance Marketplace
New Taxes & FeesPCORI Fee Insurer Fee Transitional
Reinsurance Fee
Excise Tax Risk Adjustment Program & Fee
Helps fund the “Patient Centered Outcomes Research Institute”
Funds the Health Insurance Marketplace (Exchange)
Stabilizes Individual & Small Group Markets
On Rich Benefit Coverage
Helps fund administrative cost of running the program
Individual MarketSmall Group Market51+ Fully Insured & ASO Groups
Fully Insured Only-Individual Market-Small Group
Individual MarketSmall Group Market51+ Fully Insured & ASO Groups
51+ Fully Insured & ASO Groups
Fully Insured Only-Individual Market-Small Group
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Components Driving Pricing Impacts
Rating Rules Changes
Product/Benefit Enhancements
Taxes & Fees
AverageAnnual Rate
Increase+
Individual Market Small Group Market Large Group Market
ACA compliance drives significant price increases
Community Rating causes material price disruption for healthiest groups
Incremental increases to rates beginning in 2013 to cover taxes, fees and benefits
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Key Dates & Changes for Group Plans
2013 Notifications
Employers must provide all employees with information about Exchanges in late summer/early fallEmployers with more than 250 employees required to put the cost of health benefits on W-2sFlexible Spending Accounts (FSAs) capped at $2,500 per plan year (indexed with inflation in future years)
October 1, 2013 Open Enrollment Period Begins for the Individual Health Insurance Marketplace (Exchange) and Small Group 1-50 SHOP Exchange
March 31, 2014 Open Enrollment Ends for individual and small group
Mar-Sept, 2014 Individuals can make changes outside of Open Enrollment if they have a HIPAA-qualifying event
2016 Small Group Market (and SHOP) expands to 1-100
2017 Large Groups may be able to participate on SHOP Exchange
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7 Things Employers Can Do Now
1 Know the law. Depending on the size of your firm and the composition of your workforce, there are major implications
2 View healthcare reform as a real opportunity to explore new options
3 Model your company’s situation; you may need to re-shape your workforce or capitalize on the law to vault your business forward
4 Determine if you will continue to offer coverage and when the effective date will be; be mindful of individual market Exchange enrollment periods
5 Get organized with required application information if you intend to apply for coverage through the SHOP Exchange
6 Review employer mandates, premium changes and develop strategy
7 This is an unprecedented time to shop; use a trusted advisor to help you evaluate options and make decisions
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• New option for Iowans and Nebraskans• Nonprofit CO-OP (consumer operated and
oriented plan); member owned and governed• CO-OPs established in the Affordable Care Act• “Invented” to provide affordable options for
individuals and families• 24 CO-OPs in U.S. so far• Low interest startup loans provided by federal
government• Start marketing health plans October 1• On Exchange plans for individuals and small
businesses• Off Exchange plans for all market segments• Alternative to traditional commercial carriers
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Questions?
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