The ACA and the Individual Market

HCR Support Specialist

Training Module II

Your Trainer Today:

Constance Starkey

Individual Mandate

What is the mandate?

What are the exceptions?

What is the penalty for non-compliance?

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Penalty

For the purpose of

calculating the penalty,

the IRS considers only

those household

members listed as

dependents on the

individual’s tax return.

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Minimum Essential

Coverage (MEC) Medicare,

Medicaid (Medi-Cal) or the Children’s Health Insurance Program (CHIP),

TRICARE (for service members, retirees and their families),

The veteran’s health program,

A plan offered by an employer,

Insurance purchased in the Individual market that is at least at the Bronze level, or

A grandfathered health plan

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Exceptions

Exceptions include:

those with qualifying religious exemptions,

those in a health care sharing ministry,

individuals not lawfully present in the United States, and

incarcerated individuals

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Exceptions

Also, no penalty will be imposed on:

those without coverage for less than three months

members of Indian tribes

individuals required to pay more than 8% of household

income

Qualifying individuals residing outside of the United States,

bona fide residents of any possession of the United States

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Penalty

The annual penalty for not

having minimum essential

coverage will be the greater of

a flat dollar amount per

individual or a percentage of

the individual’s taxable income.

For any dependent under the

age 18, the penalty is one half

of the individual amount.

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Flat Dollar Penalty

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Per Individual

2014 = $95.00

2015 = $325.00

2016 = $695.00

After 2016 = Indexed to Inflation

Per Dependent Under Age 18:

½ of Per Individual Penalty

The Flat Dollar

Penalty is capped

at 300% of the Flat

Dollar Amount

Flat Dollar Amount

A family of three (two parents and one child under 18) would have

a flat dollar penalty of $1,737 in 2016

$695

$695

$347

$1,737

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Flat Dollar Amount

A family of four (two parents and two children over 18) would

have a flat dollar penalty of $2,085 in 2016, due to the 300% cap.

$695

$695

$695

$695

$2,780

$695 X 300% = $2,085

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If an individual has a household income of $50,000, the

percentage would be 1% of the difference between $50,000 and

the tax threshold (which we will assume will be $10,000 for an

individual in 2014).

Percentage of Taxable Income

This individual would

need to calculate the

percentage penalty to

determine if it would

be greater than the flat

dollar penalty for 2014.

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Percentage of Taxable Income

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Household income: $50,000

Tax threshold for 2014: $10,000

Difference between income and threshold: $40,000

$40,000 X 1%: $400

Flat dollar penalty: $95

This individual would

be subject to a

percentage penalty of

$400, because this

percentage penalty is

greater than the flat

dollar penalty for 2014,

which is $95.

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The Exchange

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The Exchange

In order to be eligible to enroll in the Exchange,

an individual must be either:

a US citizen or,

a non-citizen who is lawfully present in the US

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The Exchange Premium Tax Credits are available to individuals:

with household incomes between 138% - 400% of the Federal Poverty Level (FPL) or,

are eligible for employer sponsored coverage that is below 60% actuarial value or,

if premiums exceed 9.5% of their income

Cost-sharing Subsidies are available to individuals:

enrolled in a “Silver” plan through the Exchange

Shop and Compare Tool

The Role of the Agent

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Certified Insurance Agents bring a depth of experience to

Covered California by:

Serving as trusted licensed advisors

Maintaining deep customer relationships

Providing valued service (not just enrollment but

ongoing support)

Offering solutions within and outside of Covered

California Health Plans

Being savvy marketers

Acting as experts in both individual and group markets

Enrollment

www.coveredca.com

Shop and Compare Tool

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Consumers can then

look at all the plans

available in each of

the metal tiers and

compare benefits and

premium rates.

www.coveredca.com

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Designating an Agent

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Once the Consumer has logged-in, Click the link “Find Help Near You” to locate Assistance:

Designating an Agent

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Click “Find Agent” on the page:

Designating an Agent

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Search by location

Search by name

Enter search information or just click search button for all agents (note: only certified agents will display on this page)

Designating an Agent

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Certified Agents are displayed, click on the agent’s name to select agent:

Designating an Agent

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Agent information is displayed, click the “Continue” button to select the agent:

Designating an Agent

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Attestation Page must be completed by the consumer by checking the boxes, typing their name and clicking on “Confirm”:

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Designating an Agent

Appointment and Commissions

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For the individual market:

Commissions are paid by each health insurance company

according to their active commission schedule at the time of

enrollment

Certified Insurance Agents must be directly appointed by each

of the health insurance companies in Covered California to

receive commission from the health insurance company

The commission rate is the same rate as non-exchange

business

Commissions are based on the gross premium and not the

net. This means that if an applicant is eligible for subsidies, it

will not negatively impact commission rates

Appointment and Commissions

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For the individual market:

Health insurance company premium rates are the same for

business sold with or without a Certified Insurance Agent

There are no “steering” bonuses (Agents are required to be

fair and objective when recommending plans, and not base

recommendations on bonuses or higher commissions)

Originally, Certified Insurance Agents could not be

compensated for Medi-Cal enrollment. Now compensation will

be $25.00 per enrollment.

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Agent Commissions

More Questions Does Covered California take a percentage of commissions?

No. Covered California will pay 100% of commissions owed to

Certified Insurance Agents.

Are Agents paid commissions based on gross premium or net

premium?

Currently, commissions will be based on gross premium.

What is the difference in commissions between agent/brokers

and assisters or navigators?

Agents are paid commission based on a % of premium. Certified

Enrollment Counselors are paid a fee per enrollee ($58 fee per

enrollee + $25 fee at annual renewal).

Questions

Please submit questions

to: Constance Starkey

cstarkey@lisibroker.com

Constance Starkey is an analyst in Public Relations, Public Affairs and Policy at LISI, received her certification through NAHU as a Health Care Reform Professional, and is a Certified Educator for the Broker Certification Program for Covered California. She is also a member in good standing of NAHU, CAHU and serves on the Board of Directors for LAAHU.

End Of: HCR Support Specialist

Training Module II

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