ACA LEARNING SERIES. Impact on Massachusetts & Implementation Activities to Date EMPLOYER SPONSORED INSURANCE AND AFFORDABILITY UNDER THE ACA

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1 ACA LEARNING SERIES Impact n Massachusetts & Implementatin Activities t Date EMPLOYER SPONSORED INSURANCE AND AFFORDABILITY UNDER THE ACA September 2013 A cllabrative effrt between the Executive Office f Health and Human Services and the Health Cnnectr

2 Overview 2 The Affrdable Care Act (ACA) ushers in sme new changes t the way emplyees can access subsidized health insurance at Marketplaces (like the Massachusetts Health Cnnectr) The law tries t leverage private ffers f emplyerbased cverage when cverage meets a minimum value and a federally defined affrdability standard Fr thse emplyees withut such cverage and wh meet incme criteria, subsidies will be available at the Massachusetts Health Cnnectr

3 3 Where We ve Been: Affrdability Prir t the ACA Under Massachusetts health refrm (Chapter 58), lw and middle-incme emplyees were blcked frm Cmmnwealth Care if they were ffered emplyer-spnsred health insurance where the emplyer ffered t cntribute at least 33% twards cverage This standard did nt lk t whether r nt the emplyee s share f the premium was affrdable

4 The ACA s Apprach t Affrdability 4 The ACA prvides subsidies in the frm f tax credits t individuals and families that earn up t 400 percent f the federal pverty level (FPL) (See next slide) Fr an individual t access these tax credits at the Marketplace (e.g., the Health Cnnectr), they need t either: nt have access t emplyer-spnsred health insurance Have access t health insurance thrugh their emplyer, but that cverage desn t meet a minimum value standard and/r the cst required f the emplyee fr self-nly cverage wuld exceed 9.5 percent f the emplyee s husehld incme

5 FPL Guidelines as Reference 5 Husehld Size 100% 133% 150% 200% 300% 400% 1 $11,490 $15,282 $17,235 $22,980 $34,470 $45, ,510 20,628 23,265 31,020 46,530 62, ,530 25,975 29,295 39,060 58,590 78, ,550 31,322 35,325 47,100 70,650 94, ,570 36,668 41,355 55,140 82, , ,590 42,015 47,385 63,180 94, , ,610 47,361 53,415 71, , , ,630 52,708 59,445 79, , ,520 Fr each additinal persn, add $4,020 $5,347 $6,030 $8,040 $12,060 $16,080

6 Ging Deeper Int Eligibility 6 What is Minimum Value? The Minimum Value standard (als referred t as MV ) requires that a plan ffered by an emplyer cvers at least 60 percent f allwed csts under that plan Whether a plan meets MV can be fund n the Summary f Benefits and Cverage (SBC) fr a health plan In Massachusetts, it wuld be very uncmmn fr an emplyer t ffer cverage that des nt meet this MV standard

7 Ging Deeper Int Eligibility (Cnt d) 7 What is affrdable? The ACA defines affrdable cverage, fr the purpses f determining eligibility fr tax credits at Marketplaces like the Health Cnnectr, as cverage that requires less than 9.5 percent f an individual s husehld incme fr self-nly cverage Husehld incme is based n MAGI calculatins

8 MAGI 8 Mdified Adjusted Grss Incme (MAGI) Adjusted Grss Incme can be fund n yur tax return: U.S. Frm 1040, line 37 U.S. Frm 1040A, line 21 U.S. Frm 1040EZ, line 4 MAGI cnsists f an individual s Adjusted Grss Incme, plus: Tax-exempt Scial Security Interest Freign earned incme Individuals will be able t build their MAGI by entering in their prjected annual incme and deductins int a MAGI calculatr in the nline applicatin

9 Calculating 9 Annual Husehld Incme 9.5% Maximum Annual Expected Cntributin

10 Sample Incmes and Affrdability 10 Sample Annual Incme 9.5% f Incme Affrdable Mnthly Cntributin $25,000 $2,375 $ $40,000 $3,800 $ $45,000 $4,275 $ $50,000 $4,750 $ $55,000 $5,225 $ $65,000 $6,175 $ $75,000 $7,125 $ $100,000 $9,500 $791.67

11 Affrdability f Emplyee-Only 11 Cverage Example 1: Incme: $40,000 Jhn s share f the premium: $200/mnth Is the plan affrdable? Cst: $2,400 Share f incme: 6% The plan is affrdable. Jhn cannt qualify fr premium tax credits. Example 2: Incme: $25,000 Jhn s share f the premium: $200/mnth Is the plan affrdable? Cst: $2,400 Share f incme: 10.4% The plan is nt affrdable. Jhn may qualify fr premium tax credits.

12 Affrdability f Family (Reyes 12 Family) Mm wrks at Acme. She earns $35,000. Dad is an entrepreneur and earns abut $12,000. Family Incme: $47,000. Premium Cst t Emplyee fr Emplyee-Only Plan: $196/m ($2,350/yr) 5% f incme Premium Cst t Emplyee fr Family Plan: $509/m ($6,110/yr) 13% f incme Bttm Line: N ne is eligible fr premium tax credits because family cverage is cnsidered affrdable. Slide frm Webinar-Emplyer-Cverage.pdf

13 Affrdability f Cverage (Reyes 13 Family) Family Incme: $47,000 Premium Cst t Emplyee fr Emplyee-Only Plan: $196/m ($2,350/yr) 5% f incme Premium Cst t Emplyee fr Emplyee + Kids Plan: $392/m ($4,700/yr) 10% f incme Family cverage is nt ffered. Mm and Kids Emplyee + kids plan is cnsidered affrdable because emplyee-nly plan is affrdable. Mm and kids are nt eligible fr premium tax credits. Dad Dad has n ffer f cverage. He may be eligible fr premium tax credits. Slide frm Webinar-Emplyer-Cverage.pdf

14 Affrdability f Family Cverage 14 (Reyes Family) Family Incme: $47,000 Emplyee-Only Plan: $196/m ($2,350/yr) 5% f incme Emplyee + Kids Plan: $392/m ($4,700/yr) 10% f incme Family Plan: $509/m ($6,110/yr) 13% f incme Any f these plans wuld be cnsidered affrdable because the cst f self-nly cverage is <9.5% f incme Slide frm Webinar-Emplyer-Cverage.pdf

15 MassHealth and Emplyer- Spnsred Insurance (ESI) 15 Having access t ESI des nt prevent an individual frm becming eligible fr MassHealth MassHealth may perfrm an investigatin t determine if individuals receiving MassHealth either: have health insurance that MassHealth may help pay fr; r have access t emplyer-spnsred health insurance in which MassHealth wants the individual t enrll and fr which MassHealth will help pay

16 Insurance Partnership Transitin 16 As f January 1, 2014, the Insurance Partnership (IP) prgram will be discntinued IP has been a prgram that made incentive payments t small businesses and prvided health insurance premium assistance fr previusly uninsured lwincme emplyees MassHealth and the Health Cnnectr are wrking tgether n utreach plans t bth participating small emplyers and eligible members All Emplyers will be sent a letter infrming them that the IP prgram is ending, and directing them t learn mre abut what ptins fr affrdable health insurance may be available thrugh the Health Cnnectr All Members will be sent a letter explaining the changes and what, if anything, they need t d

17 Insurance Partnership Transitin (cnt) 17 Impacts t Emplyees/Members All IP members will be evaluated t determine what benefits they qualify fr thrugh MassHealth r the Health Cnnectr - IP Members will fall int 1 f 2 categries: Grup 1: Eligible fr a MassHealth Premium Assistance Prgram, including the new MassHealth Small Business Emplyee Premium Assistance (SBEPA) Prgram Grup 2: Ptentially eligible fr subsidies thrugh the Health Cnnectr if the insurance their emplyer ffers is cnsidered unaffrdable by ACA standards (Members must apply fr cverage)

18 Insurance Partnership Transitin (cnt) 18 Impacts t Emplyees/Members (cnt) Extra utreach effrts with tailred messages have been develped t ensure a smth transitin MassHealth will have a dedicated custmer service line fr Insurance Partnership members Impacts t Emplyers MassHealth will n lnger prvide incentives t small emplyers Small emplyers will have new pprtunities t shp fr affrdable health insurance thrugh the Health Cnnectr and may qualify fr federal tax credits r premium rebates thrugh the Cnnectr s Wellness Track prgram

19 19 MassHealth Small Business Emplyee Premium Assistance Prgram Wh is eligible?: Individuals ages U.S. citizens r a qualified aliens Must be ineligible fr any ther benefits thrugh MassHealth r the Health Cnnectr Must wrk fr a small emplyer that emplys 50 r fewer full time emplyees Must have incme between 133% and 300% f FPL This is nt an emplyer benefit

20 20 MassHealth Small Business Emplyee Premium Assistance Prgram The individual has access t an emplyer-spnsred health insurance (ESI) plan and is either: Uninsured; r If insured, the individual was a member f the Insurance Partnership prgram n Nvember 15, 2013 The health insurance is cnsidered affrdable by ACA standards (s the individual is nt eligible fr Health Cnnectr subsidies) The health insurance csts mre than MassHealth wuld require the individual t pay, based n their incme.

21 21 Appendix

22 IP Transitin Grup 1 Examples 22 Murphy Family (Mm, Dad, tw kids at 130% FPL) Cst f insurance is $658/mnth Murphy family is currently eligible fr MassHealth Standard benefits Insurance meets MassHealth Premium Assistance prgram criteria fr purchase Murphy Family will be eligible fr MassHealth Standard Premium Assistance benefits Mike (single adult with n children, 210%FPL) Cst f insurance is $188/mnth Insurance is cnsidered affrdable by ACA standards (9.4% f incme) Insurance csts mre than MassHealth wuld require the individual t pay ($78) Mike will be eligible fr MassHealth SBEPA

23 IP Transitin Grup 2 Examples 23 Maria (single adult with n children, 257%FPL) Cst f insurance is $69/mnth Insurance is cnsidered affrdable by ACA standards (2.8% f incme) Insurance csts less than MassHealth wuld require the individual t pay ($118) Maria will be ineligible fr cntinued MassHealth benefits and nt eligible fr Health Cnnectr Subsidies Sam (single adult with n children, 213%FPL) Cst f insurance is $283/mnth Insurance is nt cnsidered affrdable by ACA standards (13.9% f incme) Sam will be ineligible fr cntinued MassHealth benefits. He will be ptentially eligible fr subsidies thrugh the Health Cnnectr (Must apply fr cverage)