The document discusses changes to the individual health insurance market as a result of the Patient Protection and Affordable Care Act (PPACA). Key points include: - PPACA provisions will impact how customers purchase plans, what plans they can buy, and the cost of plans. - Customers will be able to purchase plans on public exchanges, private exchanges, or off-exchange. Only public exchanges provide subsidies. - Plans must cover essential health benefits like preventive care and have standardized deductibles and copays defined by metal tiers (bronze, silver, gold, platinum). - Rates will be adjusted based on age and geography rather than health status and pre-existing conditions. Subsidies will help

1. Health Care Reform and the
Individual Medical Market
For agent use only. Not for distribution to consumers. Assurant Health is the brand
name for products underwritten and issued by Time Insurance Company.
J-106139 (New 05/2013) © 2013 Assurant, Inc. All rights reserved.

2. 2
Agenda
• Market space
– What’s happening
– Anticipated shifts
• What does it mean for your customer
– Customer classifications
– How they buy
– What they buy
– What it’s going to cost
• How Assurant Health will help you make money

3. 3
Assurant Health is your long term partner
• Assurant Health has a history of adapting to change
– Expertise in individual and small group medical
– Complex administration systems a key capability
– Experienced at dealing with regulatory and
administrative changes throughout the decades
– 120 years in complex and changing industry*
*Assurant Health is the brand name for products underwritten and issued by Time Insurance Company (est. 1892) and
John Alden Life Insurance Company (est. 1961).

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Patient Protection and Affordable Care Act
(PPACA)
• Signed into law on March 23, 2010, with the goal of
decreasing the number of uninsured Americans
• Some tenets of the law have already been enacted
with the remainder going into effect on the first
plan year on or after January 1, 2014
– Policies issued before March 23, 2010, are considered
grandfathered and are exempt from most of the provisions
Currently rules that implement the provisions of
PPACA are still being drafted and released. We are
still awaiting final rules on many PPACA
requirements

5. 5
PPACA benefit changes – already implemented
• Unlimited lifetime maximum
• Dependents covered up to age 26
– Regardless of school enrollment
• Women’s health coverage
• Preventive services
• Medical loss ratio (MLR)
– Insurers must spend at least 80% of premium on
claims and improving health care quality and if not
they have to return the difference to the employers
in the form of a rebate

6. 6
PPACA benefit changes coming in 2014
• Individual mandate
– All individuals must have minimum essential coverage in order
to avoid being subject to a tax penalty (some exceptions)
• Guarantee issue
• Elimination of pre-existing condition coverage
restrictions
• Maximum waiting periods
– 90 days
• Elimination of rating for:
– Health status, gender, size loads & industry
• Essential health benefits
• Metallic levels
– Bronze, Silver, Gold, Platinum

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Plan classifications
• Grandfathered
– Policies issued before March 23, 2010, are considered
grandfathered and are exempt from some of the main
provisions of HCR
• They are not required to cover preventive services without
cost sharing
• They do not have to cover essential health benefits
– Plans remain grandfathered so long as they do not make
significant changes in coverage
• Non-grandfathered
– Any policy issued post signing of PPACA
– Policies issued before March 23, 2010, but the customer made
changes to the plan post PPACA that changed the grandfathered
status
– Must conform to all applicable reform requirements

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What does this mean for your customer?
What does this mean
for your customer?

9. 9
Customer changes
1. Changes in how they buy
2. Changes in what they buy
3. Changes in what it’s going
to cost them

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Changes in how they buy1. Changes in how they buy

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Purchase options
• Individuals have the option of purchasing their plans
– On the public Exchange (HIX)
• Run by either state or federal government
• Subsidies can only be received by individuals who purchase
coverage on the public Exchange
– Through a private Exchange
• Private companies can consolidate offerings from multiple
insurance carriers or offer a single carrier Exchange
• Plans sold on a private Exchange must still have the essential
health benefits and metal levels
• PPACA subsidies are not available on private Exchanges
– Off the Exchange
• How the purchase process happens today
• Policies must still have essential health benefits and metal levels
• PPACA subsidies are not available off of the Exchange

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Role of the agent
• Agents have a role in each
of these purchase scenarios
• Agents will be particularly
effective in helping
customers understand the
differences and advantages
to on/off Exchange
products and options
• Agent commissions will be
same in all three purchase
scenarios

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Individual public Exchange
• There are three types of public Exchanges
established by PPACA
– Federally facilitated (federally administered)
– State partnership (state and federally administered)
– State based (state administered)
• Functions:
– To help individual shop for coverage from a variety
of health insurance providers
• Navigators provide customer assistance with
subsidy eligibility and qualified health plan
enrollment on the public Exchange
– Employed by the Exchange

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Qualified health plans
• Qualified health plans (QHPs) are plans that are
certified to be sold on the Exchange
– Plans must be QHPs to be sold on an Exchange
• QHP certification requires
qualification/accreditation by URAC or NCQA
• QHPs can be sold on or off the Exchange
– The rate on and off the Exchange for those plans must be the
same

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Why does a customer still need an agent?
• Solution selling
– Help the customer make the most informed, cost-effective
decision
• Frequent changes
– Be an expert on the changes in the law and an advisor to your
client
• Complexity
– There are a number of new concepts for your customers: on/off
Exchanges and public and private Exchanges
• Assurant Health MGAs are here to help you work
through this new environment

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Agent involvement
• States can allow agents to enroll individuals for IM
and/or assist individuals in applying for subsidies
• Agents must register with the Exchange in advance
of assisting those eligible for subsidies
– Agents must also receive training and comply with
privacy/security standards
• Agents must first ensure completion of eligibility
verification and enrollment application before
helping an individual enroll in a QHP via the public
Exchange

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Assurant Health MGAs
• Assurant Health MGAs - The agent’s partner in the
sales process with individuals and families
• Support is available
through all stages of the
selling process: from the
quote, to the close of
the sale to renewals
Call Cutler & Associates
877.411.7613
www.cutlerassociates.com

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When they buy: open enrollment
• Individuals can only purchase on the public
Exchange during open enrollment
– Initial open enrollment October 1, 2013 – March 31, 2014
– Subsequent open enrollment periods: October 1 – December 7
• A qualifying life event can trigger a special
enrollment period where individuals can purchase
on the Exchange outside of open
enrollment
– The special enrollment period for the
individual market is 60 days from the
date of a triggering event

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Changes in what they buy2. Changes in what they buy

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Minimum essential coverage
• Individuals must have minimum essential coverage
(MEC) in order to avoid a penalty. Individual major
medical plans are minimum essential coverage
• Individual major medical plans must have the
essential health benefits package on the first plan
year on or after January 1, 2014, in order to be
compliant with health care reform
• Plans that cover benefits designated as essential
health benefits must cover these benefits with no
annual limits or lifetime maximums

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Essential health benefits package
• The essential health benefit package consists of
the essential health benefits (EHBs), cost sharing
limitations and metal levels
• All plans sold on/off the Exchange after January 1,
2014, will need to have the essential health
benefits package
• Essential health benefits cover 10 categories of
services
– Individual major medical plans must include EHBs
• The EHB benchmark plans reflect what benefits will
be considered essential health benefits
– EHBs will vary by state

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EHB standard – benchmark plans
• Each state must define its essential health benefit
standard by selecting a benchmark plan
• Benchmark plans establish what the essential
health benefits are in a state
– The benchmark plan can include any state mandated benefits
that were enacted prior to December 31, 2011
• Benchmark plans are
selected by each state
– The scope and limitations of
the EHBs will differ state by state
– The benchmark plans selected
per state apply for 2014 and 2015

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Cost sharing
• Identifies what out-of-pocket costs the individual is
responsible for; not including premium
• Cost sharing will vary by metallic levels
• Total OOP max for 2014 is set at HSA federal OOP
limits for high deductible health plans. The OOP
max applies to individual major
medical, small group and
self funded
• All copays go toward total
OOP max
– Office visit and prescription

24. 24
Metallic levels
• Plans that customers buy will be identified by one of
four metallic levels: bronze, silver, gold or platinum
• Actuarial value is the percentage of claims the plan
pays for in-network essential health benefits
• Levels are identified based on actuarial value
– Bronze = 60%
Silver = 70%
Gold = 80%
Platinum = 90%
– Actuarial value
is NOT the same
as coinsurance

25. 25
Changes in what it’s going to cost them
3. Changes in what it’s
going to cost them

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Product pricing
• Products are going to have to be re-filed and
re-priced to reflect:
– The additional benefits they are required to cover
– Guarantee issue
– Changes in cost-sharing percentages
• Shifting to an adjusted community rating
– Ratings for individuals and families
– Restricted rating on age and geographic area
– Can still rate for tobacco usage
– The elimination of rating for health status, gender
and industry

27. Subsidies
• PPACA provides for subsidies for individuals purchasing
individual major medical coverage via the public
Exchange.
There are two types of federal subsidies:
Cost-sharing reduction
• Only available to those at or
below 250% of the Federal Poverty
Line (FPL), American Indians and
Alaska natives
• Reduction in out-of-pocket
expenses
• Must be enrolled in a silver plan
Advanced premium tax credit*
• Reduction in the premium that
the individual pays
• Available to individuals
between 100% and 400% of the
FPL
• Government reimburses the
carrier for this credit
*Also known as premium subsidy
1 2

28. Premium subsidy
• People earning between 100% and 400% of the
Federal Poverty Line may qualify for a premium
subsidy.
– Based on the individual’s or family’s modified
adjusted gross income (MAGI).
• The premium subsidy could be used toward any plan on
the public Exchange.
• A customer will not receive a premium subsidy for an
amount greater than the annual premium payment for
the qualified health plan in which they are enrolled.

29. Premium subsidy qualification
• Step 1: Determine the individual’s required share of premium
– The applicable percentage of MAGI is used in calculating an individual’s
required share of premium.
– The applicable percentage corresponds to the individual’s percent of FPL as set
forth in the ACA. The maximum applicable percentage is 9.5%. This is not the
premium subsidy amount.
• For example, if you are 300% of FPL, then the applicable percentage of MAGI would
be 9.5%.
– The applicable percentage multiplied by the individual’s MAGI equals the
individual’s required share of premium.
• Step 2: Determine the annual premium payment
– The annual premium payment equals the price of the 2nd lowest cost silver plan
offered on the public Exchange in that individual’s state.
• Step 3: Compare the annual premium payment to the applicable
income amount
– If the annual premium payment of the second lowest cost silver plan is greater
than the individual’s required share of premium, then the individual may
qualify for a premium subsidy.

30. Premium subsidy | Example
• Family of four
• Household MAGI of $69,000
– Puts them at 300% of the FPL
– The applicable percentage of MAGI is 9.5%
• If the premium is more than 9.5% of the MAGI,
then this family may be eligible for a premium
subsidy.
– 9.5% of their MAGI would be $6,555
– $69,000 *.095 = $6,555
• Assume the annual premium payment of the
second lowest silver on the public Exchange in
this family's state is $10,000.
• This family’s potential premium subsidy would be
$3,445.
– $10,000-6,555 = $3,445
• This premium subsidy could be used toward any
qualified health plan on the Exchange.
For illustration only.
Customers should consult their
tax advisor or legal counsel
with questions on their
subsidy eligibility. Assurant
Health does not provide tax
advice.

31. Premium subsidy | Example
• Individual
• MAGI of $44,000
– Puts him at 400% of the FPL
– The applicable percentage of MAGI is 9.5%
• If his annual premium payment is more than 9.5% of
his MAGI, then he may be eligible for a premium
subsidy.
– 9.5% of his MAGI would be $4,180
• Assume the annual premium payment of the second
lowest silver plan on the public Exchange is $5,000.
• His potential premium subsidy would be $820.
– $5,000-4,180 = $820
• His premium subsidy could be used toward any
qualified health plan on the Exchange.
For illustration only.
Customers should consult their
tax advisor or legal counsel
with questions on their
subsidy eligibility. Assurant
Health does not provide tax
advice.

32. Individual tax penalty
• If an individual chooses not to have major medical insurance, they
may be subject to a tax penalty.
• Individuals may be exempt from the penalty if:
– The premium of the lowest priced bronze plan on the public Exchange
in their state would be more than 8% of the individual’s household
income.
– The individual’s household income is below the income threshold for
filing taxes.
– The individual qualifies for any other exemption including religious
reasons, lack of citizenship, incarceration status or membership in an
Indian tribe.

33. Tax penalty, continued
• The penalty amount is the greater of the specified percent of income
or the flat dollar amount.
• The penalty amount required will increase by the cost of living after
2016.
• The flat dollar amount is the lesser of the maximum flat dollar
amount per family (noted in the table above) or the sum of the flat
dollar amounts applicable to each individual in the family.
Year
Tax as %
of income
Minimum flat
dollar
amount per
adult
Minimum flat
dollar
amount per
child
Maximum
flat dollar
amount per
family
2014 1.0% $95.00 $47.50 $285.00
2015 2.0% $325.00 $162.50 $975.00
2016 2.5% $695.00 $347.50 $2,085.00

34. Penalty example
• If a family of four (two adults, two children) has a household modified
adjusted gross income of $150,000, and does not have major medical
insurance and does not otherwise qualify for a penalty exemption, the
penalty for this family would be:
2014
1% of income = $1,500 or ($95*2)+($47.50*2)=$285
The penalty for this family in 2014 would be the percent of income in the amount
of $1,500, as it is greater than the applicable flat dollar amount of $285.
2015
2% of income = $3,000 or ($325*2)+($162.50*2)=$975
The penalty for this family in 2015 would be the percent of income in the amount
of $3,000, as it is greater than the applicable flat dollar amount of $975.
2016
2.5% of income = $3,750 or ($695*2)+($347.50*2)=$2,085
The penalty for this family in 2016 would be the percent of income in the amount
of $3,750, as it is greater than the applicable flat dollar amount of $2,085.

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How will Assurant Health help make
you money in 2014?

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Assurant Health product offerings
• Regardless of whether or not the
individual decides to purchase individual
medical insurance, there are other
Assurant Health products available that
may satisfy the individual’s needs
• Individual Major Medical
• Assurant Health Access
• Assurant Supplemental products
• A wide array of supplemental products
that can be sold on an individual basis
• Dental, Accident, Critical Illness,
Cancer/Heart/Stroke
• Fully insured small group
• Self-funded health plans

37. 37
Commissions
• Agent commission for Assurant Health products will
remain competitive
• Agent commission is required
to be the same on and off the
Exchange

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Appendix Appendix

39. 39
Public Exchange
• Public Exchanges will perform six basic functions
– Certify health plans to ensure they meet minimum benefit
standards
– Provide customer service support via a toll free number and a
website with standardized information
– Assist employers and individuals with purchasing and enrolling
in certified plans
– Utilize quality assurance measurements using a standardized
rating system
– Provide assistance for eligible individuals and small businesses
in accessing premium and cost-sharing subsidies
– Streamline access to government subsidized programs such as
Medicaid, Medicare and Child Health Plan Plus

40. 40
Essential health benefits
• The federal government requires EHB to cover the following ten
categories
– Ambulatory patient services
– Emergency services
– Hospitalization
– Maternity and newborn care
– Mental health and substance use disorder services, including
behavioral health treatment
– Prescription drugs
– Rehabilitative and habilitative services and devices
– Laboratory services
– Preventive and wellness services and chronic disease management
– Pediatric services, including dental and vision care
• Plans that cover benefits designated as essential health benefits,
including self-funded plans, must cover these benefits with no
annual limits or lifetime maximums

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Summary of benefits and coverage
• SBC is a standard document that allows consumers
to compare health plans between carriers
– The government issued a standard form that all
carriers had to complete with their information
• A SBC will be issued
– Upon policy quote
– Upon policy issuance
– Once a plan year
– Upon request

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Life events that trigger special enrollment
• Triggering events include:
– Loss of minimum essential coverage
– Individual gains a dependent or becomes a dependent through marriage, birth, adoption or
placement for adoption
– Individual gains status as a citizen, national or lawfully present individual (who previously
was not)
– Individual’s enrollment or non-enrollment was unintentional, inadvertent, or erroneous
and is the result of the error, misrepresentation, or inaction of an officer/employee/agent
of the Exchange or HHS
– An enrollee adequately demonstrates to the Exchange that the QHP (s)he enrolled in
violated a material provision of its contract in relation to the enrollee
– Individual becomes newly eligible or ineligible for a subsidy, regardless of whether the
individual is already enrolled in a QHP
– Individual whose existing coverage through an eligible employer sponsored plan will no
longer be affordable or provide minimum value for the upcoming plan year (individual
must have special enrollment period prior to end of coverage through employer-sponsored
plan)
– Individual gains access to new QHPs as a result of a permanent move
– An Indian may enroll in a QHP or change from one QHP to another once per month
– Individual demonstrates that (s)he meets other exceptional circumstances as provided by
the Exchange

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IM vs. Group Exchanges
• IM (HIX)
– Individual premium
subsidies and cost-sharing
reductions
– Individuals enroll only
during enrollment periods
– Exchange verifies
eligibility
– Individuals choose any
available plan
– Issuer collects premium
• Group (SHOP)
– Employer tax credits
– Employers can enroll at
any time during the year
– SHOP manages eligibility
and participation
– Employers verify employee
eligibility
– Employer selects metal
level, then all QHPs in that
level are available
– SHOP collects premium
and distributes to issuers

44. Thank you
For more information about Assurant Health, contact
1-8 - -
www.cutlerassociates.com
Cutler & Associates