The document provides a comprehensive overview of the Affordable Care Act (ACA) as it applies to health insurance in North Carolina, detailing coverage requirements, eligibility for government subsidies, and plan options available through the state's marketplace. Key provisions include protections against discrimination based on health status, mandatory coverage of essential health benefits, and rules regarding premiums and out-of-pocket costs. It also outlines the application process for subsidies and consequences for failing to obtain health insurance.

1. Obamacare
in North Carolina
Wanda Stephens
All information presented is subject to change. The presenter is the owner of Health
Insurance Solutions of NC and a licensed NC Health & Life Insurance Agent. She is
authorized to represent to represent the companies mentioned, but not an employee of any of
these companies or a government employee.

2. Topics covered:
Explanation of new ACA(Affordable Care Act)
provisions
Types of plans available in NC
ACA Terminology
How to choose a plan
Who is eligible for a government subsidy
Cost of new plans and amount of subsidies
How to apply for a subsidy and what questions
to expect
What to do if you don’t qualify for a subsidy
When you can apply for health insurance
What happens if you don’t purchase insurance

3. How ObamaCare has impacted North Carolina Health
Insurance Plans
As a result of the Affordable Care Act (a.k.a. ObamaCare) the following provisions are now in
place for health insurance policies with an effective date January 1, 2014 or after:
• Individuals cannot be declined for health insurance or charged more due to their health
status or gender.
• Insurance premiums are based on age, your zip code and tobacco usage.
• Coverage limitations or exclusions based on pre-existing conditions are not allowed.
• Elimination of annual and lifetime coverage limits.
• Prohibition of declining an individual for coverage based on their participation in an
approved clinical trial.
• Maternity and mental health are included on all policies.
• Preventative dental is covered with a $25 copay for members up to age 19. There is also
some vision coverage for this age group.
• Whether or not your children are students they can stay on your policy until age 26.
• Introduction of the Medical Loss Ratio (MLR) which ensures that 80% of the premium
dollars paid to the health insurance issuer are spend on providing health care. An
insurance company that does not do this must provide rebates to their policyholders.

4. North Carolina Health Insurance Plans
In NC both Blue Cross Blue Shield of North Carolina (BCBSNC) and Coventry are selling
health insurance policies on the Marketplace (Exchange).
Consumers can apply for a government subsidy and after approval enroll in a subsidized
health plan of their choice with either Coventry or BCBSNC.
Individual policies with a January 1, 2014 effective date, whether they are sold in or outside of
the Marketplace, must comply with the above Affordable Care Act requirements.
Each state was allowed to decide if they want a State-based Marketplace (where they built
their own website, did their own training and managed the program), a State Partnership
Marketplace (where they managed it in partnership with the Federal government) or a
Federally- facilitated Marketplace where a state allows the Federal government to manage all
aspects of the program.
NC chose the federally facilitated option and also decided not to expand Medicaid. This
decision means we are one of the states that forfeited a portion of the 8.4 billion a year from
the Federal government for this expansion.

5. Understanding
Insurance and
Affordable Care Act
Terminology:

6. Affordable Care Act Terminology
ACA-It stands for Affordable Care Act and is often call ObamaCare.
Marketplace- An online marketplace where individuals can compare, shop for and buy
qualified health insurance plans. It is also called the “Exchange”.
EHB- An acronym for the 10 essential health benefits that the Affordable Care Act requires
for all policies that are effective January 1, 2014 or later. These are ambulatory patient
services, emergency
services, maternity, pediatric (including dental & vision), rehabilitative services &
devices, mental health & substance use disorder, preventive (including chronic disease
management), hospitalization, prescription drugs and laboratory services.
QHP- An acronym for Qualified Health Plan which is a health plan that has the 10 essential
benefits.
Medicaid- State government agency that provides health coverage for low-income people,
families, children, the elderly and people with disabilities. You can apply anytime.
.

7. Affordable Care Act Terminology continued
CHIP- An acronym for Children’s Health Insurance Program. This is administered by the
state and provides no-cost or low-cost health insurance for children in families who earn too
much to qualify for Medicaid, but cannot afford to purchase private insurance. In NC this is
known as Health Choice. You can apply anytime.
MAGI- An acronym for Modified Adjusted Gross Income, which is the total of your adjusted
gross income and tax-exempt interest income. These are found on Lines 8b and 37 of the
IRS Form 1040 and are used to determine subsidy eligibility.
CMS- An acronym for Centers for Medicare & Medicaid. This agency, which is under the
U.S. Department of Health and Human Services, is responsible for Medicare, Medicaid and
the implementation of the Affordable Care Act.
Broker- This is an insurance agent who represents multiple insurance companies. Agents
and brokers who have completed and passed the CMS Marketplace training can assist
individuals with enrolling in a government Marketplace plan. They are compensated by the
insurance companies they represent.
.

8. Affordable Care Act Terminology continued
Navigators- Individuals who have completed the CMS training so they can assist
consumers with applying for Marketplace Plans. They also provide outreach and education
to raise awareness about the Marketplace Plans. Their activities and pay are funded
through state and federal grant programs.
Certified Application Counselors- Individuals who have completed
the CMS training and are involved in educating consumers
and helping them complete Marketplace applications.
Examples of application counselors are staff at community
health centers, hospitals or non-profit organizations.
SEP- Special Enrollment Period- This is a period
outside of open enrollment when individuals can
enroll in or change a plan purchased on the
Marketplace within 60 days due to a qualifying event.
CMS recently added new SEP for COBRA recipients
that lasts until July 1, 2014.

9. Affordable Care Act Terminology continued
Qualifying Life Event- Examples are getting married, birth or adoption of a child,
permanently moving to a new area that offers different health plan options, losing health
coverage due to job loss, divorce, loss of Medicaid or CHIP eligibility, expiration of COBRA,
or a health plan being decertified. Note: Voluntarily quitting your current health
insurance, an unexpected pregnancy or being terminated for not paying premiums is
not a qualifying event.
Step Therapy- Policy holders taking an expensive brand drug are often required by their
insurance company to try a generic equivalent. If your doctor thinks this would be a threat to
your health he can write a letter to our insurance company explaining why you must
continue to take the brand drug.
Short Term Medical Policies (STM) – As the name implies these are health insurance
policies are for individuals who need coverage for a short period. Although some will
provide coverage for up to 12 months, this is normally not a good choice since they do not
cover any pre-existing conditions and are not qualified health plans. STM only covers
unexpected illnesses or accidents and since they are not ACA compliant will not prevent
one from paying the penalty tax in 2015.

10. Affordable Care Act Terminology continued
IRS Qualified High Deductible Health Plans (HSA Plans) - With this health insurance
plan the policy holder pays for medical expenses until he reaches his deductible. These
plans can be paired with a Health Savings Account (HSA) which can reduce the policy
holder’s taxable income. The policy holder can withdraw money from his Health Savings
Account to pay his medical expenses without a penalty. Individuals who purchase these
plans are not required to set up an HSA. If they do set one up, they are not required to use
the bank their insurance company recommends. This type of policy is available on the
Marketplace.
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) allows workers
and their dependents to purchase group coverage for 18 months (or sometimes longer)
when the worker is voluntarily or involuntarily terminated. Workers can pay up to 102 % of
the cost of the premium the employer pays for coverage. The former employee can
purchase COBRA for a dependent even if he does not purchase it for himself.
.

11. North Carolina
Marketplace
Plans

12. These are the types of plans BCBS and Coventry through the Marketplace:
Bronze- Medical costs are covered at approximately 60%. Ideal for people that want low
premiums and don’t expect to need a lot of medical services.
Silver- Medical costs are covered at 70%. Designed for those who want monthly premiums
and out-of-pocket medical costs more balanced. Applicants with very low incomes are
eligible for silver enhanced plans with lower copays, deductibles and maximum out of
pockets.
Gold- Medical costs are covered at 80%. These plans are designed for individuals who
receive medical attention on a regular basis and are willing to pay a higher premium.
Platinum- Medical costs are covered at 90%. This plan is designed for people who receive
medical services frequently and prefer higher premiums with lower co-pays and
deductibles.
Catastrophic- These are the least expensive plans designed for individual who rarely have
any medical expenses. Unless you have a special exemption you must be under age 30 to
qualify for this plan. If you choose this policy you will not be eligible for a subsidy.

13. Choose your plan carefully before you go to the
Marketplace
These are the questions you need to ask:
Are your doctors and area hospitals in the network of the plan you choose?
Both BCBS and Coventry have a websites to answer this question. If you choose a tiered plan you
should find out if your hospitals or doctors are tier 1 or 2. If you use a broker or agent they can do this for
you.
BCBS has 3 different networks, Blue Advantage, Blue Select and Blue Value. The Blue Advantage
network offers the largest network and these plans have higher premiums.
Although Blue Select also has a large network, it has tiers. If your doctor or hospital is tier 2 you pay a
higher co-pay or percentage. Duke Hospitals are tier 1, but both UNC(including Rex) Hospitals and
WakeMed Hospitals are tier 2.
Blue Value network plans are the least expensive since their network is limited. If your doctors and local
hospitals are in this network one these plans is a good option for lowering you premiums. The UNC
Hospitals (including Rex) and WakeMed Hospitals are in Blue Value network, but Duke is not.
Unlike BCBS, Coventry does not offer the Marketplace plans in all the NC counties. However, they
do offer plans in 39 counties which include the major population areas such as Charlotte, the
Triad area and the Research Triangle Area. Their tier system is similar to BCBS Blue Select Plans.
Duke and WakeMed are tier 1 hospitals, but Rex and the UNC hospitals are tier 2.

14. These are the questions you should ask continued:
What is the cost of each of your prescription drugs?
Will my drugs require step therapy or special approval?
What is your drug deductible per person?
What are the co-pays for doctor visits, Urgent Care and Emergency Room?
What is your deductible, co-insurance and maximum out of pocket per person?
What is your deductible and maximum out of pocket per family?
Tip: Dental is offered for adults at an extra cost, but it is not subsidized and not price
competitive with what you can purchase outside the Marketplace.
.

15. Who is eligible for a Marketplace Plan?
Individuals or families who are not eligible for employer health insurance or whose employer does not
offer a Qualified Health Plan.
Individuals or families who are eligible for an employer plan that is unaffordable because the premium
exceeds 8% of their family income.
This chart provides a guide for
Individual and family eligibility.
Due to the non-expansion
of Medicaid you are not
eligible for a Marketplace
Plan if your income is
below a certain level.
You may still qualify for
Medicaid if you are
disabled or pregnant.
Your children may qualify for
CHIP or Medicaid even if you
don’t.

16. What information will you need when you are applying for a
subsidy?
You must provide dates of birth and social security numbers of everyone who
needs to be covered.
Child support, veteran’s payments and Supplemental Security Income are not considered part of your
income.
Income information must be provided for everyone you claim on your 1040 tax form even if they are not
applying for coverage. Your income used to calculate your subsidy can be from your tax return from 2013
as well as your expected income for 2014.
Your children’s income is included as part of your family income if you claim them as a dependent on
your income tax.
If you are not a US Citizen you will be required to provide your immigration documentation.
You will be asked about your marital status. If you are separated you must agree to file an income tax
return in 2015 with your spouse or wait until your divorce is final to apply for a subsidy.
You will be asked if you plan to file an income tax return in 2015. If you say no you will be told that you
are not eligible for a subsidy.

17. What is the amount of the premiums and subsidies?
Older individuals cannot be required to pay more than 3 times what a younger person
pays. When consumers apply through the Marketplace they also apply for a government
subsidy or other government assistance. Your subsidy can be received in advance or on
your 2015 tax return. If you choose to receive it in advance, which is the option most people
choose, the government will send it directly to your insurance company to reduce the
amount you have to pay. Subsidies are not offered to catastrophic policy holders.
Here are examples of the premiums and the associated subsidies:
A 43 year old single parent with a 13 year old and 16 year old can get a BCBS Blue Value
policy with a $25 co-pays and a $3,000 deductible for $555.84 per month. With a $45,000
income they would receive a $279.84 subsidy reducing their premium to $276.38.
A 58 year old with a $30,000 income can get this same plan for $539.49 with a subsidy of
$329.99 and would only pay $209.50 after the subsidy.
In addition to receiving a subsidy, applicants at lower income levels sometimes
receive a reduction in their co pays and deductibles. For example, a 40 year old with a
$16,000 income can get a Blue Value Enhanced Silver Plan with a $500 deductible and $5
doctor co- pays for $68.66 per month after the subsidy.
.

18. How do you apply for a government subsidy?
You can apply for a subsidy by mail, on-line, via www.healthcare.gov or by the Marketplace
at 1-800-318-2596 without help.
In person with a Navigator(1-855-733-3711), Certified Application Counselor, insurance
agent or insurance broker.
On-line or by calling the Marketplace 800 with the assistance of an agent or broker. Your
best option in my opinion.
The advantage of receiving help from an agent or broker is they can assist with the subsidy
estimate and application as well as choosing an insurance plan. Like many of the agents I
do a 3 way call with healthcare.gov and my clients. Most of the healthcare.gov agents are
adept at entering information into the web site, but since they are not licensed agents they
are not allowed to help you choose a plan. Your agent follows your application through the
enrollment process and continues to be available to answer your questions and concerns
once the enrollment is finalized.
.

19. What happens if you do not qualify for a government subsidy?
Although you can still enroll in a plan through the Marketplace, normally it is a waste of your
time. A broker can help you select a plan from BCBS and Coventry as well as the
companies not participating in the Marketplace. These include Assurant, Cigna and
Humana.
When can you apply?
Open enrollment for this year ended on 03/31/2014. The next open enrollment will be from
November 15th until February 15th. Applications completed by the 15th will have an effective
date of the 1st day of the following month.
You can also purchase health insurance during Special Election Periods for a Qualifying
Event such as a marriage, divorce, birth or adoption of a child, moving to a new area or
loss of health coverage due to loss of a job. Normally SEP’s last 60 days.

20. What happens if you do not purchase health insurance?
For individuals or families with incomes below certain levels it is unlikely there will be a
penalty.
Individuals with higher incomes will pay a penalty of $95 or 1% of their income per year,
whichever is higher.
For families the penalty for not purchasing health insurance will be $285 per family or 1% of
their family income, whichever is greater.
This penalty is expected to increase each year until 2017. The IRS will be responsible for
collecting the penalties. Insurance companies will provide their clients with documentation
that will be required when tax returns are filed.
Unless you have a SEP due to a qualifying event you will not be allowed to purchase health
insurance until November 15th and it will not be effective until January 1, 2015. Therefore
you run the risk of a penalty in 2015 if your income is above a certain level.

21. ?’s about Obamacare
in North Carolina
Contact Wanda Stephens for more information about
Obamacare and Health Insurance Plans in North Carolina.
919.845.6001 | www.HISONC.com