Marcia BenshoofStrategic Business Development

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What is a Health Benefit Exchange?

An online marketplace for individuals and small employers:

Shop features of plans containing the same base benefitsCompare information regarding cost and qualityDetermine eligibility for tax credits (premium relief)Call or sit down with someone for helpEnroll in a plan

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Colorado’s Healthcare Story

Rising health care costs are unsustainable for businesses

Approximately 800,000 Coloradans are uninsured

Roughly half of uninsured Americans are small business owners, their families and employees

Improving healthcare system and lowering costs are key to business growth and Colorado’s competitiveness

Blue Ribbon Commission for Healthcare Reform

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SB11-200: The Colorado Health Benefit Exchange Act of 2011

• Passed in May 2011• SB 200 establishes the

framework for the state Exchange

• Governed by a Board of Directors

• Legislative Implementation Review Committee

• Mission is to increase access, affordability, and choice for individuals and small employers purchasing health insurance in Colorado.

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Stakeholder Engagement

• Open Board and Committee meetings• Advisory Groups• Ad hoc meetings• Outreach

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Key Features

• Exchange will be a new gateway to the marketplace• Two marketplaces: Individual and SHOP (for

businesses with up to 50 employees)• This is not a new government healthcare system• Coloradans can still buy outside the Exchange and

inside or outside of the Exchange through brokers• Plans cost same inside and outside the Exchange• Only the Exchange will provide subsidies

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Premium Subsidies

Access to financial help to reduce the cost of premiums

• Subsidy applied up-front for individuals and families• Individuals and families earning from 133% to 400%

of the federal poverty level • Subsidy is higher for older Coloradans• Available to small businesses and non-profits with

fewer than 25 employees earning less than $50,000 - sliding scale up to 50% of the premium

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Cost Reductions for Individuals and Families

Financial help to reduce the cost of premiums– Individual earning between $15,282 to $45,960/year– Couple earning between $20,628 to $62,040/year– Family of 4 earning $31,322 to $94,200/year

• Tax credit applied up-front by IRS• Tax credit is higher for Coloradans ages 55-64Financial help to reduce out of pocket costs (co-pays and

deductibles)• Individuals earning $15,282 to $28,725/year • Family of 4 earning $31,322 to $58,875/year

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Example

• Bill is a 40 year old male making $30,000 per year• Bill enters the marketplace through the website and applies

for assistance paying for his coverage.• Bill qualifies for $166 per month in premium reduction (tax

credit).• Bill shops for and compares health plans with the same base

benefits.• Bill finds a plan that costs $375 per month. The tax credit

brings his total cost to $209 per month.

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Qualified Health PlansPlans sold in the Exchange will be organized in tiers:

Platinum: Plan covers 90% of average medical costs; consumer pays 10%

Gold: 80% -- 20%

Silver: 70% -- 30%

Bronze: 60% -- 40%

Impact to Businesses

GUARANTEED ISSUEIn 2014, all health plans must guarantee the availability and renewal of coverage regardless of health status (can’t be turned down because of pre-existing condition)

GRANDFATHERED PLANSExisting plans that are kept in 2014 are exempt from new requirements (EHBs and covering preventive services without cost sharing)

PENALTIESBusinesses with fewer than 50 combined Full-Time and FTE employees are exempt from penalties related to mandate for coverage

There is no penalty for part-time employees not offered coverage

Impact to Businesses

• Employers who currently provide insurance don’t need to change unless coverage is unaffordable

• SHOP will provide employers with opportunity to give employees more choice of plans

• SHOP will provide administrative services, such as premium aggregation, to reduce burden on employers

Opportunities for Large Employers

• Re-think your COBRA strategy– COBRA participants as a group have a disproportionate

effect on loss ratios– Represent a disproportionate administrative load– More likely to qualify for premium subsidies– Likely to have greater choice in the Exchange– May still use the tax benefits of HSAs

• Rethink your early retirement strategy

• Consider assistance and education for Part-Time employees

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COHBE Update

• One of first six states to receive approval from federal government in December to open in October

• Annual Report presented to General Assembly on January 24, posted on website

• Board approved new name: Connect for Health Colorado (to be launched in Spring with marketing campaign)

• Board completed dozens of policy decisions• Convened about 100 public meetings in 2012 (Board,

board committees, advisory groups, joint stakeholder feedback meetings)

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2013 Key Activities

• Review Applications for Navigator Entities• Work with DOI to certify health plans• Open Customer Service Phone Center• Launch broad marketing and outreach campaign• Apply for Level 2 Grant from federal government• Test technology systems and back-office functions• Train thousands of navigators, brokers, customer service

representatives, partners• Open October 1

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Coming in May 2013…

2012-2014 Exchange Timeline

Create policies for finance, audit, and prevention of fraud

Certify benefits

and health plans

Develop, implement

and test web portal

and customer

service functions

Implement Navigator program

2014Coverage

Begins2012 2013

Test all systems

Exchange launch(Oct. 2013)

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www.getcoveredco.org

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Contact

James L. Sugden, SHOP Exchange Managerjsugden@cohbe.org

www.getcoveredco.org

@COHBE

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