Health Care Reform Illinois State Bar Association...– Limits small group plan deductibles -...
Transcript of Health Care Reform Illinois State Bar Association...– Limits small group plan deductibles -...
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Marsh US Consumer, a service of Seabury & Smith Inc.
Health Care Reform Illinois State Bar Association
MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY 1
Health Care Reform Discussion Topics
1 ACA Overview
2 Frequent Changes
3 Individual Mandate, Essential Health Benefits Package, and Grandfathered Plans
4 Exchanges – Individual and Small Business (SHOP)
5 Impact on Small Employers
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
ACA OVERVIEW 2014 REQUIREMENTS
MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Affordable Care Act Background and Overview • ACA signed into law March 23, 2010
– Most transformational change in health insurance since Medicare – Survived a Supreme Court challenge, presidential election and repeated (40)
congressional attempts to repeal or remove funding
• Major Changes in 2014 – Individual mandate — Individuals must have and maintain health insurance that
provides minimum essential coverage – What are the Individual Penalties?
- In 2014: greater of $95/individual (3 per family) or 1% of family income - In 2015: greater of $325/individual (3 per family) or 2% of family income - In 2016: greater of $695/individual (3 per family) or 2.5% of family income
– Insurers unable to deny coverage due to pre-existing conditions – Exchanges — Creation of individual and small group (SHOP) exchanges run by the
states, federal government or both – Tax credits (subsidies) available only on the exchange if
- no other available coverage is affordable - doesn’t meet minimum value requirement
– Essential benefits for individual and small group plans (non-grandfathered) - No annual or lifetime limits on essential benefits
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Affordable Care Act Background and Overview • Major Changes in 2014:
– Out-of-pocket expense limits for co-pays, co-insurance, deductibles, etc. - $6,350/individual; $12,700/family
– Premium may vary only by: - Age (3:1 ratio) - Tobacco use (not in all states) - Geography - Family composition
– Limits small group plan deductibles - $2,000/individual; $4,000/family - Insurers can exceed annual deductible limits if plans “cannot reasonably reach” the
actuarial value the law sets for a given level of coverage without doing so (proposed rule) – Waiting period for new full-time employees must not exceed 90-days – Imposition of new taxes and fees – Catastrophic Plan for individuals under age 30
- Does not qualify for tax credit /subsidy
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY 5
Employer Shared Responsibility Delayed Until January 1, 2015 • Delayed
– Employer reporting requirements with respect to the health coverage offered to their full-time employees
– Assessment of shared responsibility payments until 2015
• To avoid penalties, employers with 50 or more full-time equivalent employees are incented – To provide adequate coverage (minimum value) – That is affordable (employee contributions less than 9.5% of household income for 95% of
full time employees)
• If one employee receives a tax credit (subsidy) from an exchange, the employer is subject to a penalty: – Employers offering coverage that is not affordable or adequate:
- The lesser of $3,000 for each employee that receives a tax credit or $2,000 per FT employee (excluding first 30 FT employees)
– Employers not offering coverage - $2,000 per FT employee (excluding first 30 employees)
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
CHANGING DAILY
MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Health Care Reform Changes Recent Legislation
• H.R. 2577, Introduced by Rep. Luke Messer, R-Indiana – Requirement to either offer coverage or pay a penalty would only apply to
employers with at least 100 FTE employees
• H.R. 2575, Introduced By Rep. Todd Young, R-Indiana – Would change the definition of FTE to those working an average of 40 hours per
week
• S.1330, Introduced By Sen. Mark Begich, D-Alaska – Employers would have until 2016 to offer coverage to full time employees or face
the employer penalty
• Representatives Tom Reed (R-NY) and Mike Thompson (D-CA) – Repeal the $2,000 deductible limit on small-group health insurance plans under
PPACA.
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
INDIVIDUAL MANDATE ESSENTIAL HEALTH BENEFITS PACKAGE GRANDFATHERED PLANS
MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Affordable Care Act Individual Mandate
• Individuals must have and maintain health insurance that provides minimum essential coverage through: – Private insurance market – Employer plan – State or federal health insurance exchange – Government program
• Exceptions: – Religion – Income below tax filing thresholds – Incarcerated – Undocumented – Native American heritage – Gap in coverage of less than three months
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Affordable Care Act Essential Health Benefits Package • All non-grandfathered plans offered in the individual and small group markets (both
inside and outside exchanges) must provide essential health benefits, such as: – Ambulatory services – Emergency services – Hospitalization – Maternity and newborn care – Mental health/substance abuse treatments – Prescription drug coverage – Rehabilitative services – Laboratory services – Preventive/Wellness services – Pediatric services
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
EXCHANGES INDIVIDUAL AND SMALL BUSINESS
January 1, 2014 effective date Open Enrollment begins October 1, 2013
DOL Employee Notice: No later than October 1, 2013 “New Health Insurance Marketplace Coverage Options and Your Health Coverage”
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Affordable Care Act Individual Exchanges
• States select one of the following health plans to benchmark : – One of the three largest small group plans – State employee health plans – Federal employee health plan – Largest HMO plan offered
• Out-of-pocket maximums for all plans equal to HSA limits – New limits for 2014:
- Individual: $6,350 - Family: $12,700
• Provider networks narrower inside many exchanges
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Platinum
Gold
Silver
Bronze
• Plan pays 90% • Enrollee pays 10%
• Plan pays 80% • Enrollee pays 20%
• Plan pays 70% • Enrollee pays 30%
• Plan pays 60% • Enrollee pays 40%
MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Individual Exchanges Financial Assistance
• Premium tax credits – Sliding scale of tax credits paid directly to insurers to help pay for the insurance – Household income between 100% and 400% of the federal poverty level (FPL)
- (Max: $45,960 for individuals and up to $94,200 for a family of four) – Not eligible for affordable and minimum value coverage through an employer – Are US citizens or legal residents
• Cost-sharing subsidies – Those with incomes below 250% FPL will have lower deductibles and co-pays – Individuals must be
- Eligible for premium tax credits - Enrolled in a silver plan through an exchange
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Individual Exchanges Covered California’s 2014 Standard Plans for Individuals
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Individual Exchanges Rating Region – Los Angeles North (15*) Sample Rates
40 YEAR OLD INDIVIDUAL - ESTIMATED MONTHLY RATES (15)
Plan Bronze Silver Silver
Subsidized 250% FPL
Gold Platinum
Health Net HMO n/a $222 $162 $253 $285
Blue Shield PPO $210 $252 $193 $300 $344
L.A. Care HMO $188 $253 $194 $287 $317
Anthem HMO na $254 $195 $322 $368
Molina PPO $204 $259 $200 $285 $342
Anthem EPO $207 $274 $214 $333 $386
Health Net PPO $248 n/a n/a n/a n/a
Kaiser HMO $221 $294 $234 $361 $388 *Region 15 (ZIP Codes: 90601 – 91226, 91501 – 91526, 91702 – 93599)
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
IMPACT ON SMALL EMPLOYERS
MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Affordable Care Act Small Business Health Options Program (SHOP) Exchange
• Elimination of risk adjustment factors (.90 to 1.10) in and out of the exchange
• Maximum deductibles of $2,000/individual; $4,000/family*
• Small business tax credits available to employers: – Providing at least 50% of the cost of health care
coverage – Employ less than 25 full-time employees (excludes
business owners and family members who work for the company)
– Paying annual wages averaging less than $50,000 per FT employee
– Maximum tax credit — For employers with ten or less full-time employees and averages annual wages below $25,000
• Maximum credit for tax years 2014 and beyond – For Profit — 50% of the employer’s contribution – Tax-Exempt — 35% of the employer’s contribution
* With exceptions
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Affordable Care Act Impact on Small Employers • Don’t provide medical today
– Continue to not provide benefits - Educate employees on ACA requirements
and possible subsidy
- Assist them with individual mandate compliance, in or out of the exchange
- Direct employees to Marsh for assistance - Direct members to Marsh for themselves
(carrier prison?) and dependent children attaining age 26
– Begin providing benefits - Offer qualifying small group benefits through
the traditional market or SHOP exchange - Direct employees to purchase individual
policy on or off the Exchange
• Do provide medical today – Continue providing benefits
- Determine if plan is grandfathered - Consider Early Renewal Option - Investigate new options available through the
SHOP Exchange - 2015-Multiple insurer choice for
employees at a metal level - Consolidated billing for employer - Possible tax benefits to employer
– Consider not providing medical benefits - See Column 1 - Employer loss of tax deductibility of
premiums, recruitment, and retention tool)
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Provide exchange notice to all employees by October 1, 2013, plus new employees in the future.
MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Affordable Care Act Employer Exchange Notice
• Regardless of whether or not an employer offers employees health insurance, employers subject to the Fair Labor Standards Act (FLSA) are required to provide notification of purchasing options and subsidies available through the exchange by October 1, 2013 (model notices are available at www.marshhealthoptions.com)
– One notice for employers that provide coverage – One notice for employers that do not provide
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Affordable Care Act 2018 Excise Tax
• Excise tax on high cost plans
• If annual premium exceeds: – Individual - $10,200 – Family - $27,500
• 40% excise tax on amounts exceeding these limits
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Health Care Reform Support and Solutions
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MARSH US CONSUMER COPYRIGHT 2013 CONFIDENTIAL AND PROPRIETARY
Health Care Reform Resources
• Individual Health Insurance – Website available soon – Ability to compare rates and benefits of
individual plans on and off the exchange – Support through on-line chat or dial into
call center – Estimate the size of the subsidy, if any – On-line enrollment – Private market plans and certain exchange
plans
• Call Center Support – Explain individual plan options – Determine if they qualify for a subsidy – Assist shopping experience in and out of
exchange – Offer ancillary products (for example,
dental, vision, etc.)
• For Small Groups (2-50 employees) – Traditional Small Group (2-50 employees)
market access for employers who want to buy small group products in the private market
– Access through the SHOP Exchange - Employee choice with consolidated
billing - Possible tax credits
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