Health Insurance Exchanges 101 December 2012. 22 Agenda Impact of presidential election What...
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Transcript of Health Insurance Exchanges 101 December 2012. 22 Agenda Impact of presidential election What...
Health Insurance Exchanges 101
December 2012
22
Agenda
• Impact of presidential election
• What exchanges are and health plan requirements
• Individual and employer penalties
• Big picture for small and large groups
• Underwriting changes
• Exchange functions and models
• Broker role
• How we’re preparing
• Our private insurance exchange solution
• State timeline
33
Impact of election results
President Democrat
Senate Democrat
House Republican
Implications • Least disruptive implementation of the health care reform law• HHS, as expected, began releasing some long-awaited
regulations for comment after election, such as:• Insurance Market Reforms• Exchanges Part II• Essential Health Benefits• Wellness programs• FMAP Percentages for 2014
• President Obama will have the ability to both control regulations and veto any changes to the law coming out of Congress
• With control of the House, Republicans may try de-fund portions of the law, but it is unlikely larger changes will make it through the Senate
44
What’s an Exchange: Individual vs. SHOP vs. Private
Individual SHOP Local Agencies Employers
Example
Overview • One example of what is referred to when people say Exchanges
• Defines benefit design tiers and products within state rating guidelines
• Similar to Individual Exchange, but participation determined by employers vs. individuals
• Details still to be defined (employees may have same options as Individual consumers or may purchase option(s) employers select)
Online store for specific population with options (products & health plans) pre-determined by the sponsor agency;
• Online store supporting what is typically referred to as Defined Contribution coverage from employers
• Often will contain just a single health plan’s products
Who’s Eligible?
All U.S. citizens, but subsidy eligibility is limited
Employees of Small Group employers (<100 FTE to start) that elect SHOP option
Determined by sponsor agency
Determined by employer
Subsidies? Yes, for income levels <300% FPL and if not offered qualifying employer coverage
• SG employers with <25 FTEs may receive tax credits in 2014 to 2016
• No Individual subsidies
No Federal subsidies, but eligible consumers will receive a contribution amount with which they can use to help purchase coverage
Market Size
Potential to be significant as long as coverage subsidies exist
Limited; Employers likely to drop to Individual or consider their own defined contribution solution
Limited; Requires an unique set up like a CalPERS
Potential to be significant if employers find the defined contribution model viable
PrivateGovernment Sponsored
55
Health plan requirements: Product tiers
All will include Essential Health
Benefits
Platinum 90%
actuarial value
Gold 80%
actuarial value
Bronze60%
actuarial value
Silver70%
actuarial value
Actuarial Value** =Total Expected Payments by Health Plans for EHBs
Total Costs of EHBs for the Standard Population
•Plus catastrophic plan offering for individuals younger than 30/ financial hardship
66
Health plan requirements continued
* The health care reform law does not require carriers to offer plans with at least a 60% actuarial value, nor does it require employers to provide health coverage. However, it
imposes penalties on 50+ employers that do not provide minimum coverage.
Outside exchange – Fully insured
Large Group and self-insured
Inside exchange
Outside exchange – Fully insured
Small Group and Individual
Include essential health benefits
Provide 60% actuarial value minimum
Adhere to deductible and out-of-pocket maximum limits
Comply with “metal levels” – benefit tiers with specified actuarial values (60% 70% 80% 90%)
Be certified by the exchange through which the plan is offered (certification requirements to be determined)
*
77
Penalties for individuals
Outside exchange – Fully insured
Large Group and self-insured
Outside exchange – Fully insured
Small Group and Individual
2014:Greater of $95 or 1% of taxable income
2015:Greater of $325 or 2% of taxable income
2016:Greater of $695 or 2.5% of taxable income
2017 and beyond:Annual adjustments
88
Subsidies for individuals
For exchange plans only
• To be eligible, individuals must:
– Have incomes between133% and 400% of federal poverty level (FPL)
– Not have access to minimum essential coverage through their employer or have access to coverage, but it is not affordable
• Premium credits – for any level plan
• Cost-sharing subsidies – Silver Plan only
Income ranges for 133% to 400% FPL
•Individual:$14,856 to $44,680
•Family of four:$30,656 to $92,200
99
The big picture for individuals
Americans not covered under a government plan will have three options for health insurance in 2014:
1. Get coverage through their employer if available
2. Buy an individual market plan through either:
• The individual market exchange – Purchaser may be eligible for subsidy
• The off-exchange market
3. Go uninsured (will pay penalty unless they qualify for anindividual exemption)
1010
Penalties for employers
• Lesser of $2,000 x total FTEs
– or –
• $3,000 x number of employees receiving tax credit
50 or more full-time employees
• Employer doesn’t provide minimum coverage to full-time employees (FTEs)
• $2,000 x total number of FTEs (minus first 30 FTEs)
Employer provides coverage, but it is not “affordable”
1111
Subsidies for employers
25 or fewer employers + average wage less than $50,000:
• Available on the exchange only
• Only for first two years they offer coverage though an exchange
• Credit up to 50% of employer cost
• Credits decrease on a sliding scale as group size and employee wages increase
1212
Underwriting changes
For Small Group and Individual markets:
Guaranteed issue
No health status rating
Also known as modified community
rating
3:1 age rating bands
1313
The big picture for small groups
Employers who have 49 or fewer employees will have at least three health insurance options in 2014:
1. Offer a fully insured plan through either:
• A SHOP exchange – Employer may be eligible for a temporary two-year tax credit to offset part of the employer premium contribution
• The off-exchange market
2. Offer an ASO plan, if allowed by state law, where essential health benefits and metal level requirements don’t exist
3. Stop offering coverage and let employees buy through the Individual market
• Other options may exist, such as defined contribution, adjusting contribution levels by employee, etc.
1414
The big picture for large groups
1515
Exchange functions
1616
March 23 Health care law enacted
AugustHHS started issuing planning grants to states
Exchange timeline
2010 2011 2012 2013 2014 2015 2016 2017
Dec. 14Deadline for states to submit state exchange applications
Jan. 1Exchange coverage begins
1717
What type of public exchange will exist by state?
Trending State-based Active Purchaser
Trending State-based Facilitator, non-FFE
State Exchange board in place
Trending towards Pure FFE
State Partnership FFE (retaining Plan Management)
1818
Exchange models
1919
Producer role
• Each exchange will decide how producers will be involved
• Potential producer activities may include:• Helping people enroll in QHPs
• Assisting people with their applications for credits and subsidies
• Working with individuals and small group employers look for coverage on the exchanges
▪ HHS will provide more guidance on the producer role, including how states will oversee licensing of producers
2020
How we’re preparing
Product development• Providing plan information
for healthcare.gov tool (may serve as foundation for exchange)
• Updating plan designs to comply with pre-2014 benefit requirements
• Developing and maintaining plan designs that meet the post-2014 benefit requirements
Our Private Exchange SolutionHealth Marketplace powered by Bloom Health
2222
What is a private exchange with defined contribution?
Employees can shop, compare, and enroll in
health insurance coverage and ancillary products that best meet
their needs
The private exchange provides an online
marketplace experience
The employer contributes a defined amount per employee
toward the cost of health care benefits
Employers deposit defined contribution funds into a health account or payroll
deduction
Retail shopping experience
Online marketplace
Defined contribution
Health account
Private Exchange
2323
Health Marketplace solution optimizes employer & consumer product selection
Broker/Consultant Employer
Employee uses funds to purchase benefits
Online or via call center
Employee
Generates tailored list of recommendations
Health Marketplace
Employees enroll in medical plan that aligns with their unique needs
Employer funds employee’s account
Medical and Pharmacyenrollment
•This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.
•
•Services provided by Empire HealthChoice HMO, Inc. and/or Empire HealthChoice Assurance, Inc., licensees of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans.