Health care act time to implement 8 7-13

381 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
381
On SlideShare
0
From Embeds
0
Number of Embeds
183
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Health care act time to implement 8 7-13

  1. 1. By Michael Bertaut, Healthcare Economist and Exchange Coordinator Blue Cross and Blue Shield of Louisiana 6.1 GP
  2. 2.  All information in this presentation INCLUDING THE OPINIONS OF THE PRESENTER are solely for illustrative purposes. The information is based on certain assumptions, interpretations, and calculations that are not necessarily accurate with regard to provisions of PPACA, HCERA, HIPAA, COBRA, ERISA, and other rules, regulations, guidance and all other documents issued by relevant state and federal agencies with regard to these laws and any other relevant laws. The information provided should not be considered as legal, financial, accounting, planning, or tax advice. You should consult your attorneys, accountants, and other employees or experts of this type of this type of advice based on their own interpretations, calculations, and determinations of applicable laws, rules, regulations, guidance, and any other documents and information that they determine may be relevant. The authors make guarantees or other representations as to the accuracy or completeness of the data in this presentation.  BCBSLA expressly disclaims any liability for information obtained from use of this presentation by any BCBSLA employee or by any other person. No warranty of any kind is given with regard to the contents of the presentation. 2
  3. 3.  The Marketplace @ Healthcare.gov  New Requirements for Health Insurance Companies  New Requirements for Businesses.
  4. 4.  “Obama Intends to Let Health Care Law Prove Critics Wrong by Succeeding” (NYT 7/27/13)  “Obamacare Canvassers Seek Out Florida's Uninsured” (Kaiser Health News 7/29/13)  “Obamacare's foot soldiers train to enroll the masses in California” (Reuters, 7/26/2013)  “Ad blitz for Obama’s health care law will cost at least $684 million” (Chicago Tribune, 7/28/2013)  “Obamacare spurs creation of thousands of new jobs to explain law” (Washington Post, 7/26/2013)
  5. 5. Employer Based ~160m Government ~100m Individual ~15m Healthcare.Gov! The Affordable Care Act was NOT designed, nor is their enough money allocated, to replace the Employer-Based Health Insurance System.
  6. 6.  Yes. As of 1/1/14  Exemptions: ◦ Low-income individuals who cannot afford coverage; ◦ Undocumented immigrants; ◦ Indian tribal members and their dependents; ◦ Individuals with a coverage gap of three or fewer months; ◦ Members of certain religious sects ◦ Individuals who are in prison ◦ Low-income individuals in states that have opted out of the Medicaid expansion ◦ Employees whose employer has transitional relief, during the relief period.  Failure to comply means confiscation of tax refund starting at $95 or 1% for first year and rising to $695 or 2.5% of income by 2017. 6
  7. 7.  Employer ◦ Employer coverage will continue to be the backbone of the health insurance system, albeit with many new rules to follow in 2014 and beyond.  Government ◦ If you are eligible for a government health insurance program (Medicaid, Medicare, CHIP, TriCare, Indian Health Service) you must select one of these before the Exchange  Healthcare.gov Marketplace (Exchanges) ◦ An online marketplace for health insurance. Designed to be health-neutral, gender-neutral, and very heavily subsidized by the Federal Government 7
  8. 8.  WHAT’S THE PLAN? ◦ To create a streamlined, easy to use, consumer friendly, health neutral, gender neutral, FEDERALLY REGULATED market for individual health insurance.  HOW DOES IT WORK? ◦ Designed specifically to remove the 2 biggest barriers to health insurance: Cost and Health Status, with federal subsidies and no medical questions allowed.  WHEN DOES IT OPEN? ◦ 10/1/2013. Closes again on 3/31/2014 ◦ Subsequent years open enrollment will be about 8 weeks long (October 15 – December 7th)  WHAT CAN I BUY THERE? ◦ Health, Dental, and maybe Vision insurance from many major carriers. Each state will have its own unique exchange and product selection. 8
  9. 9.  Loss of Minimum Essential Coverage (except for non- payment)  Marriage (60 days from marriage date), Birth, or Placement for Adoption (60 day window)  Gain citizenship or qualifying immigration status  Loss of AFFORDABLE employer sponsored coverage (COBRA?)  Carrier violates insurance contract  Change in eligibility for tax credits or cost sharing reductions  Move to a different Exchange Area  Indians may change plans once per month  Undefined “exceptional circumstances”  Enrolled in non- qualifying employer coverage
  10. 10. Risk Factor Pre-2014 And GF Post-2014 Non-GF Rate Changes by Class AGE OF INSURED RATE MAY VARY UP TO 10X BETWEEN 19 AND 64 YEAR OLD RATE MAY VARY ONLY 3X BETWEEN 21 YEAR OLD AND 64 YEAR OLD YOUNGER OLDER GENDER WOMEN CHARGED MORE DURING CHILDBEARING YEARS. MEN CHARGED MORE POST AGE 55 GENDER MUST BE IGNORED FOR RATE SETTING MEN WOMEN HEALTH STATUS MEDICAL RECORDS, CLAIMS DATA, PHARMACY RECORDS, ALL USED TO DETERMINE RATE OR OUTRIGHT EXCLUDE APPLICANT FROM COVERAGE HEALTH INFORMATION CANNOT ALTER RATES OR EXCLUDE ANYONE HEALTHY SICK From this grid we can see the big winners are older women with health conditions, and the biggest losers the young, healthy males. What kind of changes can I expect? New Rates will be focused on AGE!
  11. 11. $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 S t a n d a r d P r e m i u m Age of Member Age Rating Effects: Sample Current Moving to 3:1, Remove Gender PPACA Age Curve Male Current Female Current Dramatic decrease in Newborn Rates (-67%) Males Age 22-42 get rate increases up to 38%! Females get rate decreases at ages 22 through 54, peaking at (-35%) at age 40. Males get small rate decreases at ages 56- 64, peaking at (-11%)
  12. 12. Social Security Numbers (or document numbers for legal immigrants)  Employer and income information for every member of your household who needs coverage (for example, from pay stubs or W-2 forms—Wage and Tax Statements)  Policy numbers for any current health insurance plans covering members of your household  A completed Employer Coverage Tool (see page 2 of this checklist) for every job-based plan you or someone in your household is eligible for. (You’ll need to fill out this form even for coverage you’re eligible for but don’t enroll in.)
  13. 13. Family Adult 1 Adult 2 Child 1 Child 2 Ages 40 36 6 4 Issuer B B(Benchmark) B B Metal Level Bronze Silver Gold Platinum Typical Sample Premium $10,908 $12,120 $13,332 $15,350 Family Income $35,000/year (149% of FPL) Premium Tax Subsidy $10,734 $10,734 $10,734 $10,734 Family pays: $174 $1,386 $2,598 $4,616 Payment % of Income 0.4% 4.0% 7.4% 13.2% Family Income $88,000/year (375% of FPL) Premium Tax Subsidy $3,760 $3,760 $3,760 $3,760 Family pays: $7,148 $8,360 $9,572 $11,590 Payment % of Income 8.1% 9.5% 10.9% 13.2% 14
  14. 14. Plan TYPE Income of Applicant Deductible In Network CO- INSURANCE In Network MAX OUT OF POCKET Sample Benchmark Silver Individual 251% of FPL or above $2,000 80% $4,000 201% to 250% of FPL $2,000 80% $3,000 151% to 200% of FPL $500 80% $1,400 100 to 150% of FPL $0 95% $1,300 Note: Cost Sharing Reductions are ONLY available on Silver Plans, not Bronze, Gold, or Platinum plans. This is a sample computation, not an actual product.
  15. 15.  Incarcerated.  Income above 400% of FPL.  Offered coverage at work that is affordable and at least 60% AV.  Medicaid or CHIP eligible (income <138% fpl in states that have agreed to expand).  Claimed as a dependant on someone’s taxes.  Unable to attest to residency in a single state.  In the country unlawfully. 16 Once a Subsidy is Accepted, Individual MUST file Tax Return for That year.
  16. 16.  Coverage selected between 10/1/13 and 12/15/13 is effective on 1/1/14  Any coverage purchased in 2014 during open enrollment between the 1st and 15th will be effective the 1st of the following month. (i.e. 1/7/14 purchase effective 2/1/14)  Coverage purchased between the 16th and the last day of the month, will be effective the 1st of the 2nd month following (i.e. 2/20/14 purchase effective 4/1/2014).  Applicant share of first premium must be paid in full within 15 days, or by effective date, whichever is nearer date.  If application is not paid within 15 days, it will disappear from system and applicant will start over.  Employers will be asked (over and over again!) to complete the Employer Coverage Tool for their employees!
  17. 17.  The Small Business Health Options Plan (SHOP) exchange will list small group options from a variety of health carriers that can be purchased online. Groups 2-50 in 2014.  ALE’s are not SHOP-eligible.  IRS tax credits for low income small group coverage that began in 2010 will phase out of the general market in 2014 and only be available if you purchase on SHOP.  Several key features of SHOP have been delayed at least one year, possibly longer.
  18. 18. “You’re Darn Tootin’ Listen to your Grandfather!!” • Not subject to Rate Compression or New Federal Underwriting Laws • Not subject to 3:1 age rating • Can keep existing rate/benefit plans • Not required to add new coverage for USPTF Schedule B tests/immunizations at first dollar. • Not required to add new Women’s Wellness coverage at first dollar.
  19. 19.  How many benefit eligible Employees do I have?  Am I an Applicable Large Employer (ALE)?  ALE Yes, or No, What do I do?  To be or not to be Grandfathered?
  20. 20.  Any employee who averaged 30 hours of service per week or more in the previous look-back period (3 to 12 months.)  Any new hire who, after 90 days, is REASONABLY EXPECTED to work more than 30 hours/week  If a REASONABLY EXPECTED determination cannot be made after 90 days, then another 90 day period may be used to make the call.  If eligibility determination is made, and then hours change, coverage must continue for the LONGER of the look-back period or 6 months.
  21. 21.  FOR THE ALE COMPUTATION, the common law definition of employee must be used:  “Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.” (www.irs.gov)
  22. 22. Month Benefit Eligible Common Law Hours /120 FTE Total FTE AVERAGE JAN 2013 22 3300 27.5 49.5 FEB 2013 23 2800 23.3 46.3 MAR 2013 23 3250 27.1 50.1 APR 2013 23 3450 28.8 51.8 MAY 2013 24 3105 25.9 49.9 JUNE 2013 22 3271 27.3 49.3 JULY 2013 23 3655 30.5 53.5 AUG 2013 24 3705 30.9 54.9 SEPT 2013 25 3000 25.0 50.0 OCT 2013 26 3800 31.7 57.7 NOV 2013 27 3950 32.9 59.9 DEC 2013 30 4250 35.4 65.4 53 Controlled , Affiliated and Associated Groups Must be COMBINED for this computation!!!
  23. 23.  No obligations to provide affordable coverage  No obligations to provide valuable coverage  No obligations to offer coverage  No danger of fines under 4980H  You must still be able to demonstrate your Non- ALE status.
  24. 24.  You have many new Federal Obligations that can be condensed into 3 major options: 1. AVOID FINES--Must offer “affordable”, “minimum value” health coverage to 95% of all benefit eligible employees. Must offer coverage to children under age 26 (but not spouse and subsidy not required). MUST BE OFFERED AT LEAST ONCE PER PLAN YEAR!!!! 2. RISK SOME FINES—Offer coverage that fails one of the tests in #1 above. Employer is fined $250 per month per employee who “leaks” to the Exchange. Max fine is total fine computed under “3” below. 3. PAY THE FINES –Offer no coverage at all, employer must pay $2,000 per year per uncovered employee minus first 30 lives. 25
  25. 25.  Federal Poverty Line: ◦ Use 100% of FPL x 9.5% = affordable premium for all employees. ◦ In 2012, would be $11,170 x 9.5% = $1,061.15  Rate of Pay: ◦ Use hourly rate times 130/month to determine wages x 9.5% to compare to premium. ◦ At $10/hour, $1,300/month x 12 x 9.5% = $1,482.00  9.5% of Employee Box 1 W-2 income in premiums for employee-only coverage. ◦ Determined at end of calendar year, and on an employee-by- employee basis. ◦ Partial-year adjustments allowed for new employees who work part of a year. ◦ At $20,800/year ($10/hr, 40 hrs/week) = $1,976.00 Note: If my plan is “affordable” with wellness discounts, no fines will apply for employees who refuse to participate in wellness programs
  26. 26.  4980h a) Fine ◦ Requires that all ALE’s offer minimum essential coverage to AT LEAST 95% of their benefit eligible employees. ◦ If no compliance, only ONE benefit eligible employee has to draw an advanced tax credit from an Exchange to trigger the fine. ◦ Fine is ENTIRE BENEFIT ELIGIBLE WORKFORCE COUNT minus 30 x $166.67/month without coverage.  4980h b) Fine ◦ Requires that the offer in a) be “affordable” and “at least 60% actuarial value”. ◦ If no compliance, each benefit eligible employee drawing an ATC from Exchange will trigger a $250/month fine, up to a max of the fine computed in a).
  27. 27.  Designed specifically to inform employees on several important health insurance related issues. (Different notices for those who choose not to offer coverage) ◦ The existence and availability of Exchanges/Marketplaces ◦ The type of employer coverage and who qualifies ◦ Whether employer coverage complies with federal rules thus blocking the employee from Advanced Tax Credits on the Exchange. ◦ Confusing. May encourage non-eligible employees to shop on the Exchange. ◦ Existing must get within 15 days of hire date
  28. 28. Note: Form encourages employees to take a look on the Exchange, even IF YOU OFFER THEM COMPLIANT COVERAGE!!!
  29. 29.  Prove you are NOT AN ALE  Prove the employee in question was never benefit eligible when he worked for your firm  Prove the employee in question was offered an insurance plan that met the federal definitions of affordability, and offered at least 60% AV.
  30. 30.  All Individual and Small Group Plans MUST match the Benchmark Essential Health Benefits Plan in breadth of coverage.  For 2014/15, in Louisiana, the Benchmark will be the coverage offered in  BLUE CROSS GROUPCARE PPO on 12/31/2011 ◦ This is a very rich plan. Includes pregnancy coverage on all members, mental/nervous/ autism spectrum disorder, and a very wide formulary.
  31. 31. Tax/Fee Cost When? Who Pays? PCORI Fee $1 or $2 PMPY $1 for Plan Years < 10/1/13; $2 After that Carrier for Fully Insured; Sponsor for Self-Funded Transitional Reinsurance Fee $63 PMPY 2014; Lower afterwards 2014 and Beyond Carrier for Fully Insured; Sponsor for Self-Funded Health Insurer Fee $36M La 2014 $8B Nationally; $70M+ La 2017 $14.3B Nationally 2014 and Beyond Carrier for Fully Insured Exchange Fee 3.5% of Premiums in Exchange (FFE) 2014 and Beyond Carrier for fully insured Unearned Income Tax 3.8% on unearned above $200k single/$250k joint 2013 and Beyond Individual Tax Payer
  32. 32.  Total spend accumulators on every plan (all like HDHP’s)  Age-rated (non composite) billing  Every non-GF or new plan must fall into metallic levels: ◦ Bronze= 58-62% AV ◦ Silver = 68-72% AV ◦ Gold = 78-82% AV ◦ Platinum = 88-92% ◦ “SMALL” GROUP = 2-50 FOR 2014-15, 2-99 IN 2016!
  33. 33.  Civic Organization designed to provide unbiased information on PPACA  Healthcare and Wellness Information  Focused on explaining drivers of healthcare costs, the critical importance of personal wellness, and the need for access to quality healthcare for all Louisiana’s citizens.  Solely an educational resource, not seeking to create public policy  Over 100 member organizations, including LDOI!  JOIN THE EFFORT @ www.lhec.net
  34. 34. Office: 225-297-2719 Cell: 225-573-2092 35

×