Affordable care act exchange 101

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Health Insurance Exchange and

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Solutions for a Superior Workplace | Disclaimer

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reforms on individuals should be interpreted and applied. The impact of these reforms on individual situations may vary. The overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should no be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

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Solutions for a Superior Workplace | Agenda

Individual Mandate

What is an Exchange? Public vs. Private?

When will the Exchange be available?

How will Exchanges differ?

What is the estimated cost of coverage on the Exchange?

Employer Responsibility

Defined Contributions Health Plans

Q&A3

Solutions for a Superior Workplace | Individual Mandate

Supreme Court issued its decision on June 28, 2012 5:4 ruling The individual mandate is constitutional

Jan. 1, 2014: Individuals must enroll in coverage or pay a penalty

Penalty amount: Greater of $ amount or a % of income 2014 = $95 or 1% 2015 = $325 or 2% 2016 = $695 or 2.5%

Solutions for a Superior Workplace | Health Insurance Marketplace

Exchange Marketplace

Solutions for a Superior Workplace | Public vs. Private Marketplaces

Difference between two types of

Marketplaces:

Public

Private

Solutions for a Superior Workplace | Public Marketplaces

Two Types of Public Marketplaces:

The public Health Insurance Marketplace is a state- or federal- run platform where individuals can obtain health insurance coverage. They will also be able to compare and choose health plans offered by private companies and find out if they are eligible for financial assistance

The Marketplaces will also operate a Small Business Health Options Program (SHOP). There, small employers can purchase a variety of plans, and then may choose to allow its employees to choose from plans it selects or one plan. HHS delayed multi-plan availability until 2015

Solutions for a Superior Workplace | Marketplace Availability

First Open Enrollment: October 1, 2013 - March 31, 2014

Coverage starts: January 1, 2014 for plan selections made by December 15, 2013

Annual Open Enrollment (after first year):October 15th - December 7th

Coverage begins January 1 of the next year

Solutions for a Superior Workplace | Public Marketplace

Each State can choose to: Create and run its own Marketplace – State-Based

Marketplace Partner with the federal government to run some

Marketplace functions – Partnership Marketplace Have a Marketplace that’s operated by the federal

government - Federally-facilitated Marketplace

Market Saturation

• 52 million uninsured Americans• About half will explore the new Marketplace• About 19 million will be eligible for a premium subsidy

Solutions for a Superior Workplace | States Marketplace Decisions

Partnership Marketplace (7 states)State-based Marketplace (16 states and DC)

Federally-facilitated Marketplace (27 states)

WA

OR

WY

UT*

TX

SD

OK

ND

NM

NV NE

MT

LA

KS

ID

HI

CO CA

ARAZ

AK

WI

WV VA

TN SC

OH

NCMO

MS

MN

MI

KY

IA

IN IL

GA

FL

AL

VT

PA

NY

NJ

NHMA

ME

CT

DE

RI

MD

DC

* In Utah, the federal government will run the marketplace for individuals while the state will run the small business, or SHOP, marketplace.

As of May 10, 2013

Solutions for a Superior Workplace | Public Marketplaces – Online Application

Solutions for a Superior Workplace | Public Marketplaces – Paper Application

Solutions for a Superior Workplace | Marketplace Reform Mandates

Health plans must comply with new market reforms:

Fair Premiums: Health status and gender not used to set premiums; limits

on age rating

Guaranteed Renewability:Coverage must be renewed for all policyholders with limited

exceptions

Single Risk Pool: Issuers cannot use separate risk

pools to charge certain customers’ higher rates

Guaranteed Availability: Coverage must be offered to all comers, with limited exceptions


Health plans must be certified to be offered in a Marketplace, and must include 10 required Essential Health Benefits:

Ambulatory Patient Services Emergency Services Hospitalization Maternity and Newborn Care Mental Health and Substance Abuse Prescription Drugs Rehabilitative and Habilitative Services Laboratory Services Preventive and Wellness Services and Chronic Disease

Management Pediatric Services including oral and vision care


All plans must provide at least 60% actuarial value minimum

Actuarial Value is calculated as the percentage of total average costs that a subscriber will pay for covered services (e.g. copays, deductible, coinsurance, etc. Excludes premiums)

Four levels of coverage on the exchanges:

Bronze: Plans cover 60% of the costs

Silver: Plans cover 70% of the costs

Gold: Plans cover 80% of the costs

Platinum: Plans cover 90% of the costs

Solutions for a Superior Workplace | Marketplace Costs

What might unsubsidized Marketplace plans cost?

MI 25.8%

Increase

Solutions for a Superior Workplace | Marketplace Tax Credits and Subsidies

Individuals might be eligible for tax credits or subsidies

Who will be eligible? Individuals at 100% - 400% Federal Poverty Level without

access to affordable, minimum essential coverage that enroll in coverage through the Public Marketplace

Who won’t be eligible? Employees offered small or large employer plans that

provide affordable, minimum value coverage Individuals eligible for government-sponsored health care

Solutions for a Superior Workplace | Notice of Exchange

Employers must notify new and current employees of Marketplace information

Originally effective March 1, 2013 – Delayed Temporary Guidance: no later than October 1, 2013

Virtually all employers must provide to full-time and part-time employees - subject to Fair Labor

Standards Act (FLSA) – regardless if they offer coverage

Department of Labor Model Notices available

Solutions for a Superior Workplace | Notice of Exchange

Solutions for a Superior Workplace |

Defined Contribution Health Plans

Solutions for a Superior Workplace | Defined Contribution Health Plans

What is a Defined Contribution Health Plan?

Why might Defined Contribution Plans be appropriate now?

How does it work?

Benefits to Employers and Employees


What is a Defined Contribution Health Plan?

Employer gives employees a fixed contribution to purchase Health Coverage

Employee uses the funds to buy or help pay for an insurance plan they select themselves


Why now?

Marketplace is electronic platform that allows and requires insurance carriers to provide multiple options

Continued cost increases from medical inflation and ACA mandates


How does it work?


Example A – One Carrier


Sample Menu Choices for Employer

PPO HMO

$1000 Ded 80/20 $100 Ded 80/20

$1250 Ded HSA 80/20 $1300 Ded HSA 80/20

$2500 Ded HSA 80/20 $1500 Ded HSA 80/20

$3000 Ded HSA 80/20 $3000 Ded 80/20

$4000 Ded 70/30 $4000 Ded 70/30

PPO HMO

$1000 Ded 80/20 $100 Ded 80/20

$1250 Ded HSA 80/20 $1300 Ded HSA 80/20

$2500 Ded HSA 80/20 $1500 Ded HSA 80/20

$3000 Ded HSA 80/20 $3000 Ded 80/20

$4000 Ded 70/30 $4000 Ded 70/30

Option A Option B


Example B – Multi-carrier


Benefits

Allows the employer to fix cost based on budget, not insurance rate increase

Allows an employee to select coverage that best fits their need and budget

Affordable care act exchange 101

Economy & Finance

Transcript of Affordable care act exchange 101