Business Insurance | DISB | Doing Business 2.0


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The DC Department of Insurance, Securities and Banking presented at the Washington, DC Economic Partnership's Doing Business 2.0 seminar on Business Insurance (5/15/13)

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Business Insurance | DISB | Doing Business 2.0

  1. 1. DoingBusiness2.0: Business InsurancePhilip Barlow, Associate CommissionerD.C. Department of Insurance,Securities and BankingMay 15, 2013
  2. 2. Small Group Health Insurance UnderHealth Care Reform1. Goals of the Health Care Reform2. How the DC Marketplace Exchange Will Help SmallBusinesses3. What’s New as a Result of Health Care Reform?4. Marketplace Exchange5. QuestionsPresentation Overview2 | DoingBusiness2.0: Business Insurance
  3. 3. • Provide access to needed medical care and financialsecurity– Health insurance must work for you when you aresick not just when you are healthy• Create a real private market where individuals andsmall businesses are in the driver’s seat– Insurers compete based on quality and efficiency(Marketplace Exchanges)• Provide more options and better pricesGoals of the Health Care Law3 | DoingBusiness2.0: Business Insurance
  4. 4. • Providing health insurance for employees is the mostexpensive benefit offered by employers. It is also auseful benefit to help attract and retain goodemployees.• Health care reform includes several benefits forsmall business owners.• Under the federal health care reform legislation,starting in 2014 many businesses will be required tooffer health insurance to their employees or pay afine.How the DC Marketplace Exchange WillHelp Small Businesses4 | DoingBusiness2.0: Business Insurance
  5. 5. More ChoicesMore OptionsReal Price CompetitionBetter BenefitsHow the DC Marketplace Exchange WillHelp Small Businesses5 | DoingBusiness2.0: Business Insurance
  6. 6. 1. MORE CHOICESIn the current marketplace, most small businesses cannot offer theiremployees a choice of health insurers and choice of policies. TheMarketplace Exchange creates new options for small businesses to offertheir employees choices of insurers and policies and employers candecide what kind of choices to provide.– The Marketplace Exchange has invited all carriers to participate in themarketplace and has placed no limits on the number of plans theyoffer as long as they meet the minimum requirements;– Carriers can offer additional benefits – beyond the essential healthbenefits – for employers and individuals who want them; and– All grandfathered plans are exempt.How the DC Marketplace Exchange WillHelp Small Businesses6 | DoingBusiness2.0: Business Insurance
  7. 7. 2. MORE OPTIONSToday, most small businesses can offer policies from only one carrier. TheMarketplace Exchange gives small businesses new options including theability to offer:– A choice of all carriers and all policies in a metal level (i.e., Silver);– A choice of plans offered by one carrier in two contiguous metal levels(i.e., Bronze and Silver); or– The traditional model of one carrier and one policyHow the DC Marketplace Exchange WillHelp Small Businesses7 | DoingBusiness2.0: Business Insurance
  8. 8. HEALTH CARE POLICY METAL LEVELS• The four metal levels of coverage are based on “actuarial value.” Actuarialvalue indicates the percentage of health costs that, for an averagepopulation, would be covered by the health plan. The four levels providedin the ACA are:• Bronze: 60%• Silver: 70%• Gold: 80%• Platinum: 90%In other words, for a bronze plan, the health plan would cover 60% of the costfor an average population and enrollees (on average) would cover 40%. For aplatinum plan, an average individual would pay 10% out of pocket for theircovered benefits and the plan would pay 90%.How the DC Marketplace Exchange WillHelp Small Businesses8 | DoingBusiness2.0: Business Insurance
  9. 9. 3. REAL PRICE COMPETITIONNational studies indicate small businesses pay an average of 18% morethan larger companies. The D.C. Marketplace Exchange will help slow thegrowth in premiums and create more stability in future rates by:– Creating one big marketplace for small group policies will combine thepurchasing power of small businesses by enlarging the pool of covered lives;– Insurers will be required to display their prices, benefits, and other importantinformation in one, easy-to-use website, allowing employers to compare pricesand products and choose those that best fit their needs and budgets; and– Providing a transition that allows small employers to renew existing coveragein the current market before moving to the Exchange Marketplace in 2015.How the DC Marketplace Exchange WillHelp Small Businesses9 | DoingBusiness2.0: Business Insurance
  10. 10. 4. BETTER BENEFITSSome small group policies sold today lack the comprehensive benefits thatemployers want to protect their workers’ health. The MarketplaceExchange will ensure policies will include the kind of comprehensivecoverage employees need.– Parity of treatment of mental health and substance use disorderswithout day or visit limitations;– Inclusion of one or more drugs in each category of coveredmedications in a plan’s drug formulary; and– Defining covered habilitative services to include treatment of autismspectrum disorder.How the DC Marketplace Exchange WillHelp Small Businesses10 | DoingBusiness2.0: Business Insurance
  11. 11. NEW BENEFITS• All individual and small group policies must cover“essential health benefits” (EHB)• Policies also must fully cover (with no cost-sharing)recommended preventive care• Coverage for behavioral health must be equal tocoverage for physical health (i.e., parity)• Annual and lifetime limits on EHB prohibitedWhat’s New as a Result of Health CareReform?11 | DoingBusiness2.0: Business Insurance
  12. 12. ESSENTIAL HEALTH BENEFITS• Doctor visits• Hospital care, including ER visits• Maternity and newborn care• Prescription drugs• Mental health and substance abuse services• Lab services• Preventive and wellness benefits• Rehabilitative and habilitative services and devices• Dental and eye care for childrenWhat’s New as a Result of Health CareReform?12 | DoingBusiness2.0: Business Insurance
  13. 13. NEW RIGHTS• Private insurance reforms– Access to private health insurance guaranteed– Pre-existing conditions must be covered– Rates based on health or claims, gender,occupation/industry, and tobacco usage areprohibited; age limited to 3 to 1– Can’t charge small businesses higher rates– Can’t cancel/rescind coverageWhat’s New as a Result of Health CareReform?13 | DoingBusiness2.0: Business Insurance
  14. 14. BETTER QUALITY• The legislation improves the quality of coverage by:– Requiring 100% parity for mental health andsubstance abuse services without limits on visits ordays;– Not allowing substitution of benefits within the EHB(this protects against weakening coverage);– Ensuring essential prescription drug coverage; and– Clarifying that treatment for applied behavioralanalysis for autism is covered under habilitative careWhat’s New as a Result of Health CareReform?14 | DoingBusiness2.0: Business Insurance
  15. 15. What is the Marketplace Exchange?• A one-stop shop to compare plans, choose coverage, and paypremiums• Transparent marketplace with easy-to-understand informationabout health plansWho is Eligible to Use an Exchange?• Small businesses (up to 50 employees) and their employeesHow is Coverage Paid for?• One payment for all coverage made to the Marketplace.• Small businesses are eligible for federal tax credits on asliding scale to ensure affordability.Marketplace Exchange15 | DoingBusiness2.0: Business Insurance
  16. 16. Will the Marketplace change the way small businessesprovide health insurance for employees? Yes and NoYES• Employers will have greater flexibility to offer multiplecarriers and plans to their employees.• Businesses will get the benefit of being pooled with othercompanies for greater purchasing power.• Businesses will have access to all plans available in theMarketplace.• Greater transparency in comparing plans and options.Marketplace Exchange16 | DoingBusiness2.0: Business Insurance
  17. 17. Will the Marketplace change the way small businessesprovide health insurance for employees? Yes and NoNO• Businesses can continue to use the agent or broker oftheir choice to help them select coverage.• The same carriers that provide employer group insurancenow will still be offering coverage in the Marketplace (withsome new carriers as well).• Even if employees choose multiple carriers, the businesswill still just deal with one entity (Marketplace Exchange)for payment and administrative issues.Marketplace Exchange17 | DoingBusiness2.0: Business Insurance
  18. 18. Questions?18 | DoingBusiness2.0: Business Insurance