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Expo 2013 John Betson: Healthcare Reform


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How can you smooth the healthcare reform transition? Learn about the mandates currently in place, the mandates that are coming in the near future, what employers need to do, and what employees need to do. Participants can also ask specific questions about how healthcare reform may impact their organization.

Published in: Economy & Finance, Business
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Expo 2013 John Betson: Healthcare Reform

  1. 1. Managing Healthcare Reform By John Betson Colonial Life, Accident and Disability
  2. 2. Guidance and Updates • As October 1st fast approaches, the government is busy issuing a plethora of guidance. October 1st is an important date in that it is the date the marketplace, sometimes referred to as an exchange, is open for business. What this means is that individuals and small businesses can begin to enroll in health coverage through these newly implemented vehicles. Coverage purchased through these marketplaces will become effective Jan. 1, 2014, at the earliest.
  3. 3. Elections and the Supreme Court • National elections and most legal challenges are over. What was settled? –The individual mandate –Employer mandates –Medicaid expansion –Public health insurance exchanges
  4. 4. Key Things to Know Coverage Mandates Market Reforms Insurance Exchanges Disclosures & Communications
  5. 5. Key Things to Know Individual Mandate Individuals will be required to obtain qualified health insurance coverage Employer Mandate Employers will be required to offer their employees qualified health insurance coverage Exempt Employers Employers with fewer than 50 employees will be exempt from the coverage mandate Penalties for Individuals The greater of a dollar amount or percent of income. In 2014 – $95 or 1%. In 2016 – $695 or 2.5%. Penalties for Employers Penalties for employers are based on whether insurance is offered at all, or at an affordable cost. Coverage Mandates Market Reforms Insurance Exchanges Disclosures & Communications These mandates do not apply to Colonial Life products
  6. 6. Qualified Health Plan • Under the Affordable Care Act, starting in 2014, an insurance plan that is certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of- pocket maximum amounts), and meets other requirements. A qualified health plan will have a certification by each Marketplace in which it is sold
  7. 7. Key Things to Know Immediate Reforms – Prior to 2014 No lifetime limits; annual limits restricted Dependent Coverage extended to age 26 Minimum Medical Loss Ratios (MLR) Summary of Benefits and Coverage (SBC) Coverage Mandates Market Reforms Insurance Exchanges Disclosures & Communications Colonial Life products are not subject to these reforms
  8. 8. Key Things to Know Reforms Beginning January 2014 No pre-existing conditions applied Guaranteed Issue policies Adjusted Community Rating Essential Health Benefits (EHB) Maximum Deductible Limits Coverage Mandates Market Reforms Insurance Exchanges Disclosures & Communications Colonial Life products are not subject to these reforms
  9. 9. Key Things to Know Coverage Mandates Market Reforms Insurance Exchanges Disclosures & Communications W-2 Reporting Requirements Requirement Employers filing 250+ W-2 Forms must disclose the value of certain health insurance plans on W-2 Forms (January 2013) Impact to Colonial Life Products The value of hospital indemnity and specified disease products are reported if pre-taxed or employer-paid What we’re doing We’re assisting employers to meet the new reporting requirements for our products. We developed W-2 reports for impacted employers.
  10. 10. Key Things to Know Coverage Mandates Market Reforms Insurance Exchanges Disclosures & Communications Summary of Benefits and Coverage (SBC) Requirement Medical insurers must provide summaries of major medical coverage in a format dictated by HHS (Health and Human Services) (September 2012) Purpose To provide individuals with standard information so they can compare medical plans as they make decisions SBCs provide useful information for our benefits counselors when performing core enrollments* * Please refer to next slide for “Do’s and Don’ts for SBC Documents”
  11. 11. Key Things to Know Coverage Mandates Market Reforms Insurance Exchanges Disclosures & Communications Public Exchanges for Small Employers and Individuals Online Market for Health Insurance • State or federally owned and managed • 4 defined plan levels with mandated components • Subsidies for income below 400% of poverty (Family of three= $19,530) Agents, Brokers and Navigators • Agents and brokers can access public exchanges through certification process • Navigators are contracted and trained by exchanges No voluntary products allowed on public exchanges Colonial Life products are still needed to fill gaps in coverage from exchange plans Seize opportunity to help employees navigate through the new public exchanges
  12. 12. Qualified Insurance Plans Plan Level Actuarial Value Description Bronze 60% Actuarial value equals the total value of health care expenses paid by the plan, ranging from 60% to 90%. Actuarial values may be achieved by varying the level of cost-sharing across deductibles, co-payments and specific benefit offerings. Silver 70% Gold 80% Platinum 90% Catastrophic Limited to individuals under age 30 or in a defined financial hardship category
  13. 13. Distribution of Marketplace Notice to Employees • One of the most immediate matters for employers to attend to is distribution of the market place notice. • If you have not done this already please let me know and I will get you the notification letter ASAP.
  14. 14. Small Business Tax Credit (SBTC) Updates • The Affordable Care Act includes a small employer health insurance tax credit that has been in effect for several years now. • The Following are highlights of these proposed regulations. These changes begin January 1, 2014.
  15. 15. Eligible Employers. • Employers entitled to the credit remain the same. To be eligible, the employer must employ fewer than 25 full-time equivalent employees whose average annual wages are less than $50,000 (adjusted for inflation beginning in 2014). In addition, the small employer must cover at least 50% of the cost of single (not family) health care coverage for each employee.
  16. 16. Qualifying Coverage • The credit is only available for qualified health plan (QHP) coverage purchased through the Small Business Health Options Program (SHOP) and is only available for 2 consecutive years.
  17. 17. Qualifying Coverage • The small employer does not relinquish its right to the credit by not taking it immediately. In other words, the employer could decide to claim the credit in 2017 and 2018, even though it may have qualified for the credit earlier.
  18. 18. Amount of Credit • For tax years beginning in 2014 and beyond, the maximum credit will increase from 35% to 50% of premiums paid by small business employer, and from 25% to 35% paid by small tax-exempt employers.
  19. 19. Uniform Contributions • To be eligible for the credit the employer must make a uniform contribution toward health coverage. The regulations give several examples of how to determine a uniform percentage.
  20. 20. Example1. • An eligible small employer (Employer) offers a QHP on a SHOP Exchange, Plan A, which uses composite billing. The premiums for Plan A are $5,000 per year for self-only coverage, and $10,000 for family coverage. Employees can elect self- only or family coverage under Plan A.
  21. 21. • Employer pays $3,000 (60% of the premium) toward self-only coverage under Plan A and $6,000 (60% of the premium) toward family coverage under Plan A. In this example, the Employer's contributions of 60% of the premium for each tier of coverage satisfy the uniform percentage requirement.
  22. 22. Example 2 • Same scenario as Example 1, except that Employer pays $3,000 (60% of the premium) for each employee electing self- only coverage under Plan A and pays $3,000 (30% of the premium) for each employee electing family coverage under Plan A..
  23. 23. • In this example, the Employer's contributions of 60% of the premium toward self-only coverage and the same dollar amount toward the premium for family coverage satisfy the uniform percentage requirement, even though the percentage is not the same
  24. 24. • Small Business Tax Credit Calculator plans/small-business/tax-credit- calculator/index.html • AND • Health-Care-Tax-Credit-for-Small- Employers
  25. 25. Transition Relief. • If a small employer health plan year is different from a taxable year, the employer would be able to take the full 50% credit in 2014 even if it does not offer QHP coverage though a SHOP until its plan anniversary occurring in 2014, as long as:
  26. 26. – As of August 26, 2013, the small employer offers coverage in a plan year that begins on a date other than the first day of its taxable year; – The employer offers coverage during the period before the first day of the plan year beginning in 2014 that would have qualified the employer for the credit under the rules otherwise applicable to the period before January 1, 2014; and
  27. 27. • The employer begins offering coverage through a SHOP as of the first day of its plan year that begins in 2014
  28. 28. Small group rates approved • Thirteen carriers filed to sell health benefit plans in the small group market through Maryland Health Connection, including:
  29. 29. • Aetna Health Inc.; • Aetna Life Insurance Co.; • CareFirst BlueChoice Inc.; • CareFirst of Maryland Inc.; • Coventry Health and Life Co.; • Coventry Health Care of Delaware Inc.;
  30. 30. • Evergreen Health Cooperative • Group Hospitalization and Medical Services Inc.; • Kaiser Foundation Health Plan of the Mid-Atlantic; • MAMSI Life and Health Insurance Co.; • Optimum Choice Inc.; • UnitedHealthcare
  31. 31. The goal is clear • To make health insurance affordable and accessible for all Maryland residents, including the approximately 800,000 or 14 percent of Maryland’s 5.8 million residents who currently are uninsured.
  32. 32. The End…..