How can you smooth the healthcare reform transition? Learn about the mandates currently in place, the mandates that are coming in the near future, what employers need to do, and what employees need to do. Participants can also ask specific questions about how healthcare reform may impact their organization.
2. Guidance and Updates
• As October 1st fast approaches, the government
is busy issuing a plethora of guidance. October
1st is an important date in that it is the date the
marketplace, sometimes referred to as an
exchange, is open for business. What this
means is that individuals and small businesses
can begin to enroll in health coverage through
these newly implemented vehicles. Coverage
purchased through these marketplaces will
become effective Jan. 1, 2014, at the earliest.
3. Elections and the Supreme Court
• National elections and most legal
challenges are over. What was settled?
–The individual mandate
–Employer mandates
–Medicaid expansion
–Public health insurance exchanges
4. Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
5. Key Things to Know
Individual
Mandate
Individuals will be required to obtain
qualified health insurance coverage
Employer
Mandate
Employers will be required to offer their
employees qualified health insurance
coverage
Exempt
Employers
Employers with fewer than 50
employees will be exempt from the
coverage mandate
Penalties for
Individuals
The greater of a dollar amount or
percent of income. In 2014 – $95 or 1%.
In 2016 – $695 or 2.5%.
Penalties for
Employers
Penalties for employers are based on
whether insurance is offered at all, or at
an affordable cost.
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
These mandates do not apply to
Colonial Life products
6. Qualified Health Plan
• Under the Affordable Care Act, starting in
2014, an insurance plan that is certified by
the Health Insurance Marketplace,
provides essential health benefits, follows
established limits on cost-sharing (like
deductibles, copayments, and out-of-
pocket maximum amounts), and meets
other requirements. A qualified health plan
will have a certification by each
Marketplace in which it is sold
7. Key Things to Know
Immediate Reforms – Prior to 2014
No lifetime limits; annual limits restricted
Dependent Coverage extended to age 26
Minimum Medical Loss Ratios (MLR)
Summary of Benefits and Coverage (SBC)
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Colonial Life products are not
subject to these reforms
8. Key Things to Know
Reforms Beginning January 2014
No pre-existing conditions applied
Guaranteed Issue policies
Adjusted Community Rating
Essential Health Benefits (EHB)
Maximum Deductible Limits
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Colonial Life products are not
subject to these reforms
9. Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
W-2 Reporting Requirements
Requirement
Employers filing 250+ W-2 Forms must disclose the
value of certain health insurance plans on W-2 Forms
(January 2013)
Impact to Colonial Life Products
The value of hospital indemnity and specified disease
products are reported if pre-taxed or employer-paid
What we’re doing
We’re assisting employers to meet the new reporting
requirements for our products. We developed W-2
reports for impacted employers.
10. Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Summary of Benefits and Coverage (SBC)
Requirement
Medical insurers must provide summaries of major
medical coverage in a format dictated by HHS (Health
and Human Services) (September 2012)
Purpose
To provide individuals with standard information so they
can compare medical plans as they make decisions
SBCs provide useful information for our benefits
counselors when performing core enrollments*
* Please refer to next slide for “Do’s and Don’ts for SBC Documents”
11. Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Public Exchanges for
Small Employers and Individuals
Online Market for Health Insurance
• State or federally owned and managed
• 4 defined plan levels with mandated components
• Subsidies for income below 400% of poverty (Family
of three= $19,530)
Agents, Brokers and Navigators
• Agents and brokers can access public exchanges
through certification process
• Navigators are contracted and trained by exchanges
No voluntary products allowed on public exchanges
Colonial Life products are still needed to fill gaps in
coverage from exchange plans
Seize opportunity to help employees navigate
through the new public exchanges
12. Qualified Insurance Plans
Plan Level
Actuarial
Value
Description
Bronze 60%
Actuarial value equals the total value
of health care expenses paid by the
plan, ranging from 60% to 90%.
Actuarial values may be achieved by
varying the level of cost-sharing
across deductibles, co-payments
and specific benefit offerings.
Silver 70%
Gold 80%
Platinum 90%
Catastrophic
Limited to individuals under age 30 or in a defined
financial hardship category
13. Distribution of Marketplace
Notice to Employees
• One of the most immediate matters for
employers to attend to is distribution of the
market place notice.
• If you have not done this already please
let me know and I will get you the
notification letter ASAP.
14. Small Business Tax Credit
(SBTC) Updates
• The Affordable Care Act includes a small
employer health insurance tax credit that
has been in effect for several years now.
• The Following are highlights of these
proposed regulations. These changes
begin January 1, 2014.
15. Eligible Employers.
• Employers entitled to the credit remain the
same. To be eligible, the employer must
employ fewer than 25 full-time equivalent
employees whose average annual wages
are less than $50,000 (adjusted for
inflation beginning in 2014). In addition,
the small employer must cover at least
50% of the cost of single (not family)
health care coverage for each employee.
16. Qualifying Coverage
• The credit is only available for qualified
health plan (QHP) coverage purchased
through the Small Business Health
Options Program (SHOP) and is only
available for 2 consecutive years.
17. Qualifying Coverage
• The small employer does not relinquish its
right to the credit by not taking it
immediately. In other words, the employer
could decide to claim the credit in 2017
and 2018, even though it may have
qualified for the credit earlier.
18. Amount of Credit
• For tax years beginning in 2014 and
beyond, the maximum credit will increase
from 35% to 50% of premiums paid by
small business employer, and from 25% to
35% paid by small tax-exempt employers.
19. Uniform Contributions
• To be eligible for the credit the employer
must make a uniform contribution toward
health coverage. The regulations give
several examples of how to determine a
uniform percentage.
20. Example1.
• An eligible small employer (Employer)
offers a QHP on a SHOP Exchange, Plan
A, which uses composite billing. The
premiums for Plan A are $5,000 per year
for self-only coverage, and $10,000 for
family coverage. Employees can elect self-
only or family coverage under Plan A.
21. • Employer pays $3,000 (60% of the
premium) toward self-only coverage under
Plan A and $6,000 (60% of the premium)
toward family coverage under Plan A. In
this example, the Employer's contributions
of 60% of the premium for each tier of
coverage satisfy the uniform percentage
requirement.
22. Example 2
• Same scenario as Example 1, except that
Employer pays $3,000 (60% of the
premium) for each employee electing self-
only coverage under Plan A and pays
$3,000 (30% of the premium) for each
employee electing family coverage under
Plan A..
23. • In this example, the Employer's
contributions of 60% of the premium
toward self-only coverage and the same
dollar amount toward the premium for
family coverage satisfy the uniform
percentage requirement, even though the
percentage is not the same
24. • Small Business Tax Credit Calculator
http://www.aetna.com/employer-
plans/small-business/tax-credit-
calculator/index.html
• AND
• http://www.irs.gov/uac/Small-Business-
Health-Care-Tax-Credit-for-Small-
Employers
25. Transition Relief.
• If a small employer health plan year is
different from a taxable year, the employer
would be able to take the full 50% credit in
2014 even if it does not offer QHP
coverage though a SHOP until its plan
anniversary occurring in 2014, as long as:
26. – As of August 26, 2013, the small employer
offers coverage in a plan year that begins on
a date other than the first day of its taxable
year;
– The employer offers coverage during the
period before the first day of the plan year
beginning in 2014 that would have qualified
the employer for the credit under the rules
otherwise applicable to the period before
January 1, 2014; and
27. • The employer begins offering coverage through
a SHOP as of the first day of its plan year that
begins in 2014
28. Small group rates approved
• Thirteen carriers filed to sell health benefit
plans in the small group market through
Maryland Health Connection, including:
29. • Aetna Health Inc.;
• Aetna Life Insurance Co.;
• CareFirst BlueChoice Inc.;
• CareFirst of Maryland Inc.;
• Coventry Health and Life Co.;
• Coventry Health Care of Delaware Inc.;
30. • Evergreen Health Cooperative
• Group Hospitalization and Medical
Services Inc.;
• Kaiser Foundation Health Plan of the
Mid-Atlantic;
• MAMSI Life and Health Insurance Co.;
• Optimum Choice Inc.;
• UnitedHealthcare
31. The goal is clear
• To make health insurance affordable and
accessible for all Maryland residents,
including the approximately 800,000 or 14
percent of Maryland’s 5.8 million residents
who currently are uninsured.