HealthCare Reform (PPACA)

1
HealthCare Reform (PPACA)
2
Employer Mandate

• Employees are impacted by Employer decision to
  offer healthcare
• Employee enrolling in non-compliant plan faces
  penalty
• Employer offering compliant plan voids employee
  chance for subsidy
• If Employer wants to offer compliant plan for
  employees, they need to meet two provisions of
  Employer Mandate
• Affordability
• Actuarial Value

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Affordability

• Rule An employee cannot pay more than 9.5 of
  their household income for health insurance
• Safe Harbor
• Employee only coverage
• Employees W-2 earnings
• Example An employee earning 11.50 an hour
  (23,920 annually) cannot pay more than 190 per
  month 23,920 x 9.5 12

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Actuarial Value

• Rule The health plan must cover at least 60 of
  the actual cost of healthcare
• Combination of co-pays, deductibles,
  co-insurance, out-of-pocket maximums and drugs
• Out-of-pocket maximums cannot exceed 6,350 per
  individual and 12,700 per family

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How Many Employees?
Full time employee is any employee working at
least 30 hours per week FTEE is calculated by
aggregating all part-time hours for a month and
dividing by 120 FTE above/below 50?? Subject
to change
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Transition Period

• When does your plan have to be compliant for your
  employees to avoid having to pay a penalty?
• Employerslt 50 employees have until their plan
  renews in 2014
• Employersgt 50 employees have until January 1,
  2016 REVISED February 2014

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Employers lt 50 EmployeesProvided by UHC

• Transition Period
• Early renewals, December 1
• Delay impact of HCR until 2014
• Non compliant plans will not be offered in 2014

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Community RatingProvided by UHC

• Currently groups are evaluated by
• age, sex, zip code, plan design and then adjusted
  by risk
• 51 age band
• Community rating eliminates
• gender and risk adjustment
• 31 age band
• Increases of 30 or more predicted

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Employers lt 50 Employees 2014
Expectations

• Community Rating
• Plan Compliance
• Individual Age Rates
• Projected 2014 Rate Adjustments
• 40 groups
• Predominantly two carriers
• Average projected increase 62

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Employersgt 50 Employees

• Pay or Play delayed until 2016
• Reporting delayed until January of 2015
• No transition period (could change)

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Federal Health Exchange Notice

• Delivered to employees by October 1
• No penalty if not delivered, but.
• Must state if plan meets actuarial value of at
  least 60
• Most will leave page three blank
• Must be provided to new hires going forward

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Health Exchanges in NC

• Federally run virtual marketplace where
  individuals can purchase health insurance for
  themselves and their families
• State Based Model
• Partnership Model
• Full Federally Facilitated Model
• Open enrollment is October 1, 2013 thru March 31,
  2014

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Health Exchanges in NC

• NC and SC are Federally Run Exchanges
• Carriers
• BCBSNC
• Coventry
• 55 plan designs offered
• Plans offered will vary by zip code
• Individuals will only see what is available to
  them

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Plan Characteristics

• Co-pays, deductibles, etc. accumulate to out of
  pocket maximum
• Wellness covered at 100
• 5 tier Rx plans, generic to have two levels
• Pediatric Vision
• Routine eye exam
• One pair eyeglasses w/ frame or contacts

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Metal Plans

• Platinum
• 90 Actuarial Value
• Low co-pays
• Low out of pocket
• Gold
• 80 Actuarial Value
• Low co-pays
• High out of pocket

• Silver
• 70 Actuarial Value
• Co-pays available
• Max out of pocket
• Bronze
• 60 Actuarial Value
• Some Co-pays/H.S.A. Plans
• Max out of pocket

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Plan Designs

• BCBSNC
• Offer variety of plans including traditional PPO,
  HSAs and limited network plans
• 2 Platinum, 5 Gold, 11 Silver, 6 Bronze,
  2 Catastrophic
• Coventry
• 1 Gold, 1 Silver, 2 Bronze, 1 Catastrophic
• Big emphasis on limited network plans in
  Charlotte and surrounding area, lowest cost

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Federal Subsidies

• Individuals with no access to a compliant group
  plan are eligible
• Individuals with household incomes from 100 to
  400 of the Federal Poverty level are eligible
• Thresholds
• 46,000 for individuals
• 94,250 for family of four

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Federal Subsidies

• Individuals with incomes less than 23,000 and
  families of four with less than 47,000 could be
  eligible for plans that cost 0
• Individuals that fall under 250 of the Federal
  Poverty Level will see their out of pocket
  expenses reduced on Silver Plans only.
• Individuals will pay their monthly net premium
  to the appropriate insurance company
• The government will pay the difference

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Federal Subsidies

• Individuals are not eligible to receive a
  subsidy if they have access to a compliant group
  plan at their place of work or their spouses.

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Enrollment

• www.healthcare.gov
• Directly with carriers
• Verification of individual
• Honor system of income and access to coverage
• Enrollment could take 20-60 minutes
• Pay premium to process application

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Enrollment Assistance

• First time buyers
• Limited network plans
• Need to know all of their options
• Some enrollers represent only one company
• Transition period allows individuals to enroll
  when company plan renews

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Your Plan and HCR

• In 2014 there will be spot checks to make sure
  individuals are actually eligible for subsidies
• Insurers will relax their eligibility
  requirements
• Employers with strong plans and contributions
  should encourage employees to investigate the
  exchange
• Once an employee enters the exchange, it could be
  tough to get them back

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• Your Plan and HCR

• Develop a two year plan with Senior Management
• What are your expected costs (increases)?
• How can we stay compliant?
• What would it mean if we dropped heath insurance?
• Spouses
• What other plans are available?
• Communicate with employees
• Ask more from your advisor
• If you allow your employees to go to the
  exchange, make sure that they see all options