HBAK Health Care Reform


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HBAK Health Care Reform

  1. 1. What should HBAK expect
  2. 2.  Barring some unforeseen successful legal challenge, Health Care Reform will take full effect on January 1, 2014.  This will be the most comprehensive reform legislation to affect the country since Social Security.
  3. 3. Low Risk Mid Point High Risk Low Premium High Premium  Insurance is the spreading of risk among many people to assist a few who have a loss.  In theory, your insurance coverage, be it health, life, auto, home, business will fall somewhere on this continuum  In this model, the low risk/low premium policy is likely paying more than they actually should, and the high risk/high premium policy is likely NOT paying enough for the claims that they generate
  4. 4.  Guaranteed coverage regardless of health status  Community Rating  No Pre-existing condition waiting period  Mandated Health plan coverage’s  Premiums will go UP!
  5. 5. $150 $450$405$300 Community Rate These people are happy.These people will be negatively affected by law. Good Risk Bad Risk  It is estimated that premiums for healthy clients will increase somewhere between 60% to 90% on average as a result of Health Care Reform.  Many employers will look for alternative ways to cover employees or drop coverage and pay a potential penalty
  6. 6. These are the rates we will have available because we can still “Risk Rate”$150 $450$405$300 Community Rate These people are happy.These people will be negatively affected by law. Bad Risk  Establish a Health Insurance Trust to pool resources and employee lives into one large pool to spread the risk of the overall population of our eligible members  Treated as one Single Large Employer, we would avoid some of the risk rating provisions of the act.  This is an employer based group plan. Individuals are not eligible to participate.
  7. 7.  The health insurance portion of the HBAK Program is provided by Anthem  This is a fully insured program  We do not envision utilizing any “self insured” products as an offering through the trust  Other products such as dental, vision, STD, LTD and Life are available to members
  8. 8.  Originated in late 1970’s  Program grew in scope  Currently covers approximately 50,00 lives in Kentucky  Has been a consistent membership recruitment and retention tool
  9. 9.  First, the endorsing Trade Association must meet the purpose, operational structure and membership rules described by the Department of Labor to be considered a “bona fide” Association.  We believe you meet those criteria Requirements
  10. 10.  Second, as a “bona fide” Association, you are eligible to offer a group health plan with the following conditions: ◦ It is a “Single Plan”: The Association must be the health plan sponsor and fiduciary, as defined by ERISA and the DOL. ◦ Group Size: The Plan can only be offered to groups of two or more employees. (Pending approval for 1 man groups) ◦ Like-Business or Common industry: The plan must be eligible to like-businesses who are active members of the sponsoring Association ◦ Common renewal date: The Plan needs to act as a “single Plan” and thus, all employers will move to a common anniversary date which for KRMCA will be April 1 of each year. Requirements
  11. 11.  Third, because the Association Health Plan is now considered a “large group”, all other state and federal large‐group provisions apply. Therefore, beginning with the 2013 renewal, all subscribing groups will be eligible for: ◦ State and Federal large group benefits such as autism, MHP and Medicare as secondary payer. ◦ Section 125 services ◦ COBRA services Requirements
  12. 12.  This is employer based coverage, not individual coverage ◦ 75% of eligible employees must have credible coverage ◦ 50% of eligible employees must be on the plan ◦ Employer must contribute at least 50% of single premium ◦ Employer must be a member in good standing of the association ◦ Employer must maintain association membership to remain eligible