THE KANSAS AFFORDABLE CARE ACT IMPLEMENTATION. Linda J. Sheppard November 6, 2014

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1 THE KANSAS AFFORDABLE CARE ACT IMPLEMENTATION Linda J. Sheppard November 6, 2014

2 The Kansas Market Approximately 348,000 Kansans are uninsured % of the state s population 44,130 are children, but number of uninsured children has declined over the past six years 60.5% are between the ages of 18and 44 and 69.1% have family incomes above the FPL More than three out of four (75.2%) uninsured Kansans are employed (source: Kansas Health Institute, 2013 Census Data)

3 The Affordable Care Act Enacted March Law required immediate, significant changes in benefits in health plans sold to individuals and small employers by September 23, 2010 Big challenge for both insurance companies and state insurance regulators

4 2010 ACA Changes No pre-existing condition exclusions for children Dependent coverage to age 26 Small business tax credit (SHOP purchase required for 2014 and beyond) No lifetime limits and phase-out of annual limits Coverage of preventive health services with no out-of-pocket costs 4 No rescissions

5 The Affordable Care Act Ten titles covering wide range of issues but most of the focus has been on Title I, the changes in health insurance Nine other titles covering changes in Medicaid/CHIP, quality/efficiency of health care, delivery systems, payment systems, improving public health, disease prevention and management, health care workforce, transparency, and integrity of health care ACA will likely be played out over the next decade or more

6 2014 ACA Provisions Elimination of pre-existing condition exclusions Guaranteed issue & renewability of coverage Individual and family rates based on age, geography and tobacco use Tax credits & subsidies to help pay premiums & out-ofpocket costs; for those people whose incomes are from 100% to 400% of the Federal Poverty Level Limits on out-of-pocket costs, $6,350/$12,700 (additional reductions for </=250% FPL) 6

7 2014 ACA Provisions Mandated coverage for essential health benefits Uniform explanation of benefits and standardized definitions Individual mandate to ensure consumers do not wait until they are ill to seek coverage Individuals will be penalized for no coverage, with some exceptions These provisions are for policies sold both inside & outside the Marketplace 7

8 Every plan must include essential health benefits Ambulatory patient services (doctors office visits and outpatient services) Emergency services Hospitalization Maternity & newborn care Mental health & substance abuse disorder services, including behavioral treatment Prescription drugs Rehabilitative and habilitative services Laboratory services Preventive and wellness services and chronic disease management Pediatric services including oral and vision care 8

9 Plan levels of coverage All plans cover the essential health benefits. Health plans available with different levels of cost sharing, which includes deductibles, co-payments and coinsurance All plans offer the same package of benefits in each level. What varies is how much the plan pays and how much consumer will pay (cost sharing). 9

10 2014 Federally-Facilitated Marketplace Technically, four companies offered plans on the FFM for 2014 two Blues companies, and two Coventry/Aetna companies Total of 72 health plans, and 12 stand-alone dental plans, only Blues companies offered SHOP plans 10

11 2014 Outreach and Education Created consumer-oriented website, InsureKS.org, to provide Kansans with facts about ACA and the FFM Conducted and participated in hundreds of public meetings all around the state to educate consumers Maintained regular contact with agent community to support those registered to assist consumers with QHP enrollment 11

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13 Individual Mandate Individuals required to have minimum essential coverage beginning January 1, Penalties for not having coverage: $95 per adult, $47.50 per child, up to $285 or 1% of household income, whichever is higher $325 per adult, $ per child, up to $975 or 2% of household income, whichever is higher 2016 $695 per adult, $ per child, up to $2,085 or 2.5% of household income, whichever is higher Penalty will be issued when you file your federal taxes. For example, a 2014 penalty will be assessed when you file your taxes in April

14 2014 Enrollment 57,013 Kansans enrolled in a Marketplace plan between October 1, 2013 and April 19, % female; 45% male (54% / 46% national data) 38% - age 34 and younger (4% higher than national data) 19% - chose a bronze plan; 60% - silver; 16% - gold (enrollment in gold plan is 7% higher than national data), 2% - platinum, 4% catastrophic 14

15 2014 Enrollment 79% selected plan with financial assistance (6% lower than national data) Adults age make up 12.5% of the population and 11.2% of the uninsured but accounted for 25.6% of enrollees. Pent up demand for affordable and adequate coverage?? Children age 0-17 make up 25.3% of the population and 12.7% of the uninsured but accounted for only 6.8% of enrollees. Perhaps others eligible for Medicaid or CHIP?? 15

16 2014 Enrollment Enrollment among racial and ethnic groups generally aligned with their proportion of the population and the uninsured with two exceptions: Hispanic/Latino population make up 11.2% of Kansans and 25.3% of the uninsured but only 7.2% of the enrollees. White/non-Hispanic population make up 77% of Kansans and 59.3% of the uninsured but accounted for 77% of enrollees 16

17 Enrollment period 2015 Open Enrollment Length Dates Effective Date Annual 3 months Nov. 15, 2014 Feb. 15, 2015 Special Period lasts 60 days from triggering event, such as loss of minimum essential coverage; marriage, birth or adoption; individual gains legal immigration status; individual becomes newly eligible for tax credits or subsidies Qualified individuals must select their QHP by the 15 th of the month for coverage to be effective on the 1 st of the following month. QHP selections made after the 15 th become effective the 1 st of the second following month. Effective dates can be earlier if all QHP issuers agree. 17 *No coverage is effective prior to Jan. 1, 2015

18 2015 Open Enrollment One new HMO company offering health plans this year, for a total of five companies Total of 82 qualified health plans available on Marketplace, 64 individual and 18 for small employer groups. Some of these plans have imbedded pediatric dental benefit. Significant increase in number of stand-alone dental plans, 13 companies offering plans. 18 InsureKS.org website currently being updated and new information will be added.

19 2015 Open Enrollment Thirteen companies offering SAD plans: Four companies offering a total of 14 individual plans, both on and off the Marketplace. Best Life & Health and Renaissance Life & Health offering largest number of individual plans. All 13 offering a total of 63 plans for small employer groups, on and off the Marketplace. Delta Dental, Best Life & Health, Kansas City Life, and Lincoln National Life offering largest number of plans 19

20 2015 Open Enrollment 20 Adult dental benefits: Benefits vary depending upon plan chosen and company issuing coverage Preventive benefits oral exams, prophylaxis, x- rays Primary benefits simple extractions, filings inlays, periodontic treatment of gums, denture repair Major benefits crowns, onlays, dentures, bridge (with some limitations), oral surgery, dental implants (with some limitations), teeth whitening, orthodontics (with limitations)

21 2015 Open Enrollment Pediatric dental benefits: Consistent with services provided in Medicaid/CHIP Preventive services cleanings, fluoride treatments, sealants, space maintainers Diagnostic services periodic dental evaluations, x-rays Treatment services filings, crowns (prior authorization may be required), root canals, periodontal therapy, dentures, oral surgery, orthodontics (in certain cases) 21

22 Small Business Health Options (SHOP) Marketplace Starting November 15, 2014, small employers will be able to apply, compare plans, and enroll in a SHOP plan online for coverage beginning on or after January 1, However, in Kansas, only plans offered by Blue Cross and Blue Shield will be offered on the SHOP Marketplace Employees will also be able to enroll in the plan online. Health insurance agents registered with the SHOP will have access to special online features to make it easier for them to help small employers apply, choose coverage, enroll, and manage the coverage. 22

23 Small Business Issues Small businesses with fewer than 50 FTEs are not required to provide coverage, but may receive tax incentives if they purchase coverage through the SHOP Marketplace To qualify for the tax credit, all of the following must apply: Fewer than 25 FTE employees Average employee salary of $50,000 per year or less Employer pays at least 50% of employees premium cost for coverage purchased through the SHOP Marketplace Tax credit is worth up to 50% of employer s contribution toward employees premium costs (up to 35% for tax-exempt employers) 23 Additional information for small employers is available at

24 Large Employer Shared Responsibility Mandate (50 or more FTEs) 24 Further Delay Originally set to begin in 2014, the large employer mandate requires employers with 50 or more FTE employees to offer coverage to all FTEs, defined as employees who work 30 hours or more per week. In 2013, the large employer mandate was delayed until 2015 On February 10, 2014, a further delay for enforcement of the mandate was announced for certain large employers.

25 Large Employer Shared Responsibility Mandate (50 or more FTEs) Further Delay Employers with FTEs will not be required to comply with the mandate to offer affordable health insurance until Employers with 100 or more FTEs will be required to offer coverage to at least 70% of their employees in 2015 In 2016, large employers will be required to offer coverage to at least 95% of their employees. 25

26 Large Employer Responsibility (50 or more FTEs) If employer offers minimum value coverage and that coverage is affordable for employees, employees will not be able to opt out of employer s plan and go to the Marketplace to apply for a tax credit. If the dollar amount that the employer requires the employee to contribute for the monthly premium for employee-only coverage does not exceed 9.5% of the employee s household income that is considered affordable. 26

27 Large Employer Responsibility (50 or more FTEs) If an employer doesn t offer minimum value coverage and one of its employees receives a subsidy through the Marketplace, the employer will be subject to a penalty: $2,000 annually, times the number of employees, minus 30. If an employer does offer coverage, but an employee receives a subsidy through the Marketplace because the coverage offered by the employer is not affordable, the employer will be subject to a penalty of $3,000 annually for each employee receiving a subsidy, up to a maximum of $2,000 times the number of full-time employees, minus

28 Kansas Insurance Department 420 S.W. 9 th Street Topeka, KS Phone: