Health Care Reform Preparedness 104: State of the Exchange


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Guidelines for the Colorado Health Benefit Exchange and our Federal Exchange are still up in the air. What do these various funding, administration, and oversight issues mean for employers and how will plan pricing, availability, and benefits be addressed? This presentation is designed for the Colorado business leader who needs to understand the current state of the exchanges. In this session, we’ll go over the very latest developments and how they could impact local businesses, discuss how you can create a proactive multi-year benefits strategy, and introduce resources to help you stay on top of this constantly changing landscape.

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Health Care Reform Preparedness 104: State of the Exchange

  1. 1. HEALTH CARE REFORMPREPAREDNESS 104:State of the ExchangeBrought to you by:
  2. 2. Recap of Previous SessionsChanges through 201322010 – 2011 • Small employer tax credit rolled out• Employers can declare their plans grandfathered• No lifetime maximum on benefits• Kids covered up to age 26• Preventative care provided with no cost sharing• No over-the-counter drugs under HSA/health FSA2012 • Must report value of health coverage onW2• New SBC format for easier plan comparisons• Expanded preventative care including free contraceptives2013 • Health FSA now limited to $2,500• New PCORI fee of $1 per employee per year ($2 next 6 yrs)• New Medicare taxes on those earning over $200,000
  3. 3. Recap of Previous SessionsChanges in 2014 & Beyond3MarketChanges• All policies must be guaranteed issue with no exclusions forpre-existing health conditions• All group policies for 2-50 EE’s will be community rated• New individual and small group exchanges will be available• New fees on insurance companies will be added to premiumsPay or PlayMandate• NO MANDATE ON EMPLOYERSWITH LESSTHAN 50 EE’S• Larger employers must provide coverage or pay penalties• If no coverage, penalty is $2,000 per EE except first 30• If coverage not “affordable,” pay $3,000 for each EE w/subsidyCoverageChanges• Waiting periods can’t exceed 90 days• Cost sharing limits: $2,000/$4,000 deductible for smallemployers, out of pocket max is limited to HSA limits for all• Cadillac tax in 2018 on premiums that exceed $850/mo single
  4. 4. Health care todayEmployers161MILLION11MILLIONIndividuals47MILLIONUninsured49MILLIONMedicaid& CHIP42MILLIONMedicare
  5. 5. State Insurance Exchanges
  6. 6. •Exchanges will be onlinemarketplaces for individuals andsmall businesses to compare andpurchase coverage•Exchanges are not a new concept•But the scale is bigger Shop features of plans containingthe same base benefits Compare information regardingcost and quality Determine eligibility for taxcredits (premium relief) Call or sit down with someonefor help Enroll in a planWhat is the Colorado Health BenefitExchange (Connect for HealthColorado)?
  7. 7. Features of the Connect forHealth Colorado Marketplace• Serving individuals, families and smallemployers with 2-50 employees• A new/different way to shop for healthinsurance• The sole access to new federal financialassistance, based on income• A separate non-profit, committed toColorado mission
  8. 8. • Not a replacement for the current market orbrokers• Not engaged with negotiating rates betweencarriers and providers• Not part of Medicaid• Not a new government health care system• Not a State agency or regulatory body• Does not pull funding from ColoradoGeneral FundThe Connect for Health ColoradoMarketplace Is Not
  9. 9. Why will people use theindividual exchanges?Exchange participationAny U.S. citizen or legal immigrant is allowed to purchase coverage on the individual exchangesExchange subsidiesA sliding scale of subsidies to pay for coveragepurchased through the exchangesIndividuals and families with incomes between 100% and400% of the Federal Poverty Level can receive subsidiesIndividual mandateRequires everyone to have health coverage or pay a tax penaltyGuaranteed issue and rating limitsAnyone who applies for coverage must be acceptedInsurers can only adjust premiums based on age,family size, tobacco use and location
  10. 10. • The Marketplace is for Coloradans who currentlybuy insurance on their own, who are uninsured,or don’t have access to coverage through theiremployer• Online shopping, with assistance, if desired, byphone and in-person• Health plans will provide a range of coveragelevels• Customers can access new federal financialassistance to lower premiums, co-pays anddeductibles• Several ways to shop: browse health plans,estimate savings, or apply online for federalfinancial assistanceIndividuals and Families
  11. 11. Individual exchangesConsumervisits stateexchangewebsiteConsumerprovidesincome,citizenship,and locationto exchangeExchangeshows plansavailable intheconsumer’slocationConsumerchooses theplan theywantConsumerenrolls inplan withinsurancecompany
  12. 12. • The Marketplace will provide small group plan optionsto Colorado employers with 2-50 employees• Employers with up to 100 employees can be served in2016• Employers can provide greater choice to theiremployees with multiple carriers/ plans• Employees can use benefit allowance to shop forhealth plans• Small business tax credits will be available (up to 50%of premium) for employers with 2-25 employees,earning on average $50,000 or less• Other value-added services will be provided, likepayment aggregation, management tools and abilityto use brokersSmall Employers
  13. 13. Financial help to reduce the cost ofpremiums– 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 pocketcosts (co-pays and deductibles)• Individuals earning $15,282 to $28,725/year• Family of 4 earning $31,322 to $58,875/yearCost Reductions for Individualsand Families
  14. 14. Maximum Premiums by FamilySize
  15. 15. Federal law will require health plans sold to individuals andsmall businesses inside and outside of the Marketplace toprovide, at a minimum, the following categories of services(essential health benefits):• Ambulatory patient services• Emergency Services• Hospitalization• Maternity/newborn care• Mental health/substance abuse• Prescription drugs• Rehab/habilitative services and devices• Laboratory services• Preventive and wellness care/chronic disease management• Pediatric services, including oral and vision careComprehensive Coverage
  16. 16. • The intent is to make comparing andpurchasing health coverage convenient andcompetitive• Increase choice• Helps consumers make an informed decisionby creating transparency about options• Only place to check eligibility and register fortax credits and other benefits• In addition to insurance brokers, theMarketplace will offer a statewide network oftrained professionals to assist consumersBenefits for Consumers
  17. 17. Actuarial ValueACTUARIAL VALUE: The percentage of total average costs for coveredbenefits that a plan will cover. (source: and
  18. 18. Qualified Health Plans (QHP)-Metal Tiers•To offer coverage through theexchanges, carriers must havetheir plans certified by thestate as Qualified Health Plans(QHPs). QHPs must:– Cover EssentialHealth Benefits– Meet coverage,quality andtransparencystandards– Fit into at least theSilver and Gold tiersof exchangecoverage– Cannot be morethan +/- 2% of AV•Available to those up toage 30 or to those who areexempt from the mandateto purchase coverageCatastrophic•Pays for 60% of the costs ofthe planBronze•Pays for 70% of the costs ofthe planSilver•Pays for 80% of the costs ofthe planGold•Pays for 90% of the costs ofthe planPlatinum
  19. 19. • Varies from state to state- carriers inColorado must file rates and plandesigns by the end of April• We should know by May 2nd whichcarriers will be participating in bothMarketplaces• By the June session we should havea better idea of how the plans stackup inside and outside the exchangeDeadlines
  20. 20. • The Individual Marketplace opens for business onOctober 1, 2013 for January 1, 2014 effective dates– The first open enrollment period goes through Marchwith the latest effective date of 4/1/14. Future openenrollment period will be 10/15-12/7 with an effectivedate of 1/1• All plans are guarantee issue• Individuals must enroll during the “open enrollment”period or will be subject to penalties• Cannot obtain coverage outside of open enrollmentwithout a “qualifying event”• Qualified individuals can only obtain subsidies throughthe Individual MarketplaceIndividual Enrollment
  21. 21. Penalties for individuals2014• $95 per adult and $47.50 per child (up to $285 for afamily) or 1% of taxable income, whichever is greater2015• $325 per adult and $162.50 per child (up to $975 for afamily) or 2% of taxable income, whichever is greater2016• $695 or per adult and $347.50 per child (up to $2,085 fora family) or 2.5% of taxable income, whichever is greater2017• And beyond – annual adjustments
  22. 22. • Small groups can enroll in the SHOP any month (nospecific open enrollment period)• Employers that decide to drop their group plans donot need to do so until their renewal– We believe this creates a qualifying event for thoseemployees to obtain coverage outside of openenrollment• Small groups are not subject to penalties for notoffering health coverage and do not have to complywith the rules of offering coverage– Can currently discriminate (contributions, managementcarve outs by class, salary, etc), but this is expected tochange for all non-grandfathered plans, but likely won’timplement until group renewal following rulingSHOP (Small Business HealthOptions Program) Marketplace
  23. 23. • Pre-tax small group plans will beavailable in and out of the Marketplace• If employer decides to drop coverageand gross up salaries to encourageemployees to obtain coverage throughthe Marketplace, employer must paypayroll tax on gross up and employeepays income tax and loses taxadvantage on premium contributionTax Treatment of Group vsIndividual Coverage
  24. 24. A Summary of Your ChoicesAdvantages: Advantages: Advantages:EEs may get subsidies Choose multiple carriers No new processSimplifies compliance Aggregate Billing May be more plan choiceNo cost to employer Small Biz Tax Credit Broker can assist group & EEsBroker can help EEs enroll Broker can assist group & EEsIndividualExchangeSHOPExchangeSmall GroupMarket
  25. 25. Brought to you by:Thank You!Questions?Eden Ripingill(303) 306-2561Eden.M.Ripingill@kp.orgKristen Russell(303)