By Michael Bertaut,
Healthcare Economist and Exchange Coordinator
Blue Cross and Blue Shield of Louisiana
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.
The Marketplace @
for Health Insurance
“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,
“Obamacare spurs creation of thousands of
new jobs to explain law” (Washington Post,
Care Act was NOT
designed, nor is
to replace the
Yes. As of 1/1/14
◦ Low-income individuals who cannot afford
◦ Undocumented immigrants;
◦ Indian tribal members and their dependents;
◦ Individuals with a coverage gap of three or
◦ 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.
◦ Employer coverage will continue to be the backbone
of the health insurance system, albeit with many
new rules to follow in 2014 and beyond.
◦ 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
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.
Loss of Minimum
(except for non-
Marriage (60 days from
marriage date), Birth, or
Placement for Adoption
(60 day window)
Gain citizenship or
Loss of AFFORDABLE
Carrier violates insurance
Change in eligibility for
tax credits or cost
Move to a different
Indians may change
plans once per month
Enrolled in non-
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
GENDER WOMEN CHARGED MORE
YEARS. MEN CHARGED
MORE POST AGE 55
GENDER MUST BE
ALL USED TO DETERMINE
RATE OR OUTRIGHT
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!
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64
Age of Member
Age Rating Effects: Sample Current Moving to 3:1,
PPACA Age Curve
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%)
Social Security Numbers (or document numbers for
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.)
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%
Plan TYPE Income of
Deductible In Network
MAX OUT OF
251% of FPL
$2,000 80% $4,000
250% of FPL
$2,000 80% $3,000
200% of FPL
$500 80% $1,400
100 to 150%
$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.
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.
Once a Subsidy is Accepted,
Individual MUST file Tax Return for
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
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
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
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.
“You’re Darn Tootin’
Listen to your
• Not subject to Rate
Compression or New Federal
• Not subject to 3:1 age rating
• Can keep existing
• Not required to add new
coverage for USPTF Schedule B
tests/immunizations at first
• Not required to add new
Women’s Wellness coverage at
How many benefit eligible Employees do I
Am I an Applicable Large Employer (ALE)?
ALE Yes, or No, What do I do?
To be or not to be Grandfathered?
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
If eligibility determination is made,
and then hours change, coverage
must continue for the LONGER of
the look-back period or 6 months.
FOR THE ALE
common law definition of
employee must be used:
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
/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!!!
No obligations to
No obligations to
No obligations to offer
No danger of fines under
You must still be able to
demonstrate your Non-
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.
Federal Poverty Line:
◦ Use 100% of FPL x 9.5% = affordable premium for all
◦ 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
◦ Determined at end of calendar year, and on an employee-by-
◦ 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
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 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%
◦ 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).
Designed specifically to inform employees on
several important health insurance related issues.
(Different notices for those who choose not to
◦ 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
◦ Confusing. May encourage non-eligible employees to
shop on the Exchange.
◦ Existing must get within 15 days of hire date
Note: Form encourages employees
to take a look on the Exchange,
even IF YOU OFFER THEM
Prove you are NOT AN ALE
Prove the employee in
question was never benefit
eligible when he worked for
Prove the employee in
question was offered an
insurance plan that met the
federal definitions of
affordability, and offered at
least 60% AV.
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
◦ This is a very rich plan. Includes pregnancy
coverage on all members, mental/nervous/ autism
spectrum disorder, and a very wide formulary.
Tax/Fee Cost When? Who Pays?
PCORI Fee $1 or $2 PMPY $1 for Plan
Carrier for Fully
$63 PMPY 2014;
Carrier for Fully
$36M La 2014
$70M+ La 2017
Carrier for Fully
Exchange Fee 3.5% of Premiums
in Exchange (FFE)
Carrier for fully
3.8% on unearned
Total spend accumulators on every plan (all
Age-rated (non composite) billing
Every non-GF or new plan must fall into
◦ 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
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!
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