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Subsidies for individuals

For exchange plans only

• To be eligible, individuals must:– Earn between 100% and 400% of federal

poverty level (FPL)

– Not have access to minimum essential coverage through their employer or have access to coverage, but it is not affordable

– Not be eligible for minimum essential coverage through government-sponsored programs such as Medicare and Medicaid

• Premium credits – For any level plan

• Cost-sharing subsidies – Silver Plan only

Income ranges of 100% - 400% FPL

• Individual:$11,490 to $45,960

• Family of four:$23,550 to $94,200

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Penalties for individuals

2014:Greater of $95 or 1% of taxable income

2015:Greater of $325 or 2% of taxable income

2016:Greater of $695 or 2.5% of taxable income

2017 and beyond:Annual adjustments

KAISER EXAMPLE $50k annual pay example over

2014,15 & 16

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WHAT WHEN WHO PAYS HOW MUCH

Comparative Effectiveness Research Fee

Reinsurance Assessment

Tax on high earners

Tax on unearned income

Insurer fees

High-cost insurance tax

Plan/policy years ending 10/1/12

1/1/2014

Tax year beginning 1/1/2013



Tax year beginning1/1/2018

Insurers of fully insured plans; sponsors/administrators of self-insured plans

Issuers of fully insured plans

Individuals

Individuals

Issuers of fully insured plans

Issuers of fully insured plans;

sponsors/administrators of self-insured plans

$1 per person per year; adjusted for subsequent years

Estimated at $5.25 per person per month

.9% increase on Medicare, in excess of $200K single/$250K married

3.8% on unearned income in excess of $200K single/$250K married

Estimated at 2.46% of premium, plus state fee

40% on plan costs exceeding “Cadillac” thresholds

Reform-relatedtaxes and fees

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Applies to:• Individual and Small Group• Non-grandfathered plans

• On and off exchange

Does not apply to:

• Large Group plan

• ASO plans

• Grandfathered plans

Benchmark plan:

• Each state will select for the purpose of defining EHBs

• If no selection, default is SG plan with the highest enrollment

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Categories• 10 identified in the law

• Any category not covered by the benchmark must be supplemented • Habilitative services

• Pediatric vision• On and off exchange plans

• Pediatric dental• On exchange plans need not include if standalone dental is available on

exchange• Off exchange plans need not include if reasonably assured that enrollee is also

enrolling in an exchange-certified standalone dental plan

• Plan must cover the greater of • One drug in each category and class, or • The same number of drugs in each category and class as the EHB benchmark

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Categories• Mental Health parity rules apply to Individual and SG plans

• Adult vision and dental are not EHBs, even if covered under the benchmark

• States may require services to be covered beyond the EHB benchmark coverage• State will be responsible for the cost of these services for plans offered on the

Individual exchange or SHOP.

• Issuers may choose to cover services beyond EHBs

• Substitution of benefits or quantitative limits within specific EHB category is permitted

• Must be actuarially equivalent

• Large group and self-funded plans do not need to cover all 10 categories of EHBs. However, if they do cover EHBs

• The out-of-pocket maximum applies to any EHBs

• EHBs cannot have annual or lifetime dollar limits

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The most significant changes will be in markets for individuals and small employers

• Rating constraints, product constraints, new benefit mandates, and new taxes will have the biggest impact.

• The impact will vary significantly between each individual and each small employer.

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Different studies forecast a range of impact

• One report, led by former CBO Director Doug Holtz-Eakin of the American Action Forum, found that on average, premiums for young, healthy people in the individual and small group market would jump 169% while the costs for older, less healthy people would decrease by an average of 22%

• A study by the actuarial firm Milliman in Ohio shows the changes expected for small employers will range from a decrease of 25% to an increase of 130%

• In Indiana, Milliman found that the increase in premiums in the individual market beginning in 2014 could range from 75%-95% and rates for others would decrease

• Other studies conducted by Dr. Jonathan Gruber of MIT in Maine, Wisconsin, Minnesota and Colorado found that premiums in the individual market may increase as much as 85% and premiums in the small group market may increase more than 20%

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OPEN Enrollment Periods

DEFINED OPEN ENROLLMENT periods will exist On Exchange

THE ACA DOES NOT ADDRESS Open Enrollment periods Off Exchange

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• NY and ME require year round open enrollment.

• OH has year round open enrollment products for people who do not otherwise have access to coverage.

• CA requires an open enrollment period to allow currently covered individuals to move to an equal or lesser plan if they have had 18 months of continuous coverage.

• WI requires carriers to allow current enrollees to move to less rich coverage at renewal.

• Child-only open enrollment periods exist in CA, CO, GA, KY, IN, MO.

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*All exchanges required to offer this option through SHOP.

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Options for Small Employers

Employers who have 50 or fewer employees will have at least the following options in 2014:

• Offer a fully insured plan through either:• A SHOP exchange – Employer may be eligible for a temporary two-year tax

credit to offset part of the employer premium contribution

• The off-exchange market

• Offer an ASO plan, if allowed by state law, where EHB and metal level requirements don’t exist

• Stop offering coverage and let employees buy through the Individual market

• Combine to be able to purchase through the large group market

• Offer “non-affordable” coverage to some employees to make them eligible for subsidies on individual exchanges

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2010

2011

2012

2013

2014

2015

2017

March 23Health care law enacted

AugustHHS started issuing planning grants to states

July 11HHS issued first set of proposed rules

DecemberDeadline for states to submit exchange plans

January 1HHS determines whether state exchange will be ready by October

October 1Open enrollment begins

January 1Exchange coverage begins

Target dateFor exchanges to be financially self-sufficient

State optionTo expand exchange eligibility to larger groups

Exchange TimelinesMany of the details, regulation and guidance regarding these programs are still up in the air.

2020

Supposed to take effect several years ago

•On April 18, 2011, the Department of Labor held a public forum

•The Labor Department has stated it will issue regulations on the auto enrollment requirement in the future, and will give employers adequate notice of when to comply.

•Although the Labor Department has previously said that it would require auto enrollment in 2014, that date has been pushed off to the indefinite future.

Automatic enrollment applies to employers with 200 or more lives

Automatic Enrollment

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• APPLICABILITY TO MULTIEMPLOYER PLANS – CONFUSING

• RECORDKEEPING REQUIREMENTS• Keep detailed records on look-back,

stability periods, determination of full-time employee status

• ASSESSMENT AND PAYMENT OF EXCISE TAX• IRS will send notice after it examines

employee tax returns and employer informational filing under IRC 6056 (employer reporting to IRS on health insurance)

• Employer has opportunity to respond to notice before paying

• If employer liable, IRS will send demand for payment

Miscellaneous Provisions

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QUESTIONS?

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Legal

•SERVICES PROVIDED BY EMPIRE HEALTHCHOICE HMO, INC. AND/OR EMPIRE HEALTHCHOICE ASSURANCE, INC., LICENSEES OF THE BLUE CROSS AND BLUE SHIELD ASSOCIATION, AN ASSOCIATION OF INDEPENDENT BLUE CROSS AND BLUE SHIELD PLANS.

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