Lockton Health Reform Employee Communications Toolkit

Transcription

1 Lockton Health Reform Employee Communications Toolkit L O C K T O N C O M P A N I E S

2 Lockton Health Reform Employee Communications Toolkit CONNECT WITH LOCKTON Follow Lockton Companies for important benefits news and information. and watch for benefits news and updates. Like Lockton Companies on Facebook to see what s happening. Subscribe to the Lockton Health Reform and Compliance Services Blog for breaking news (LocktonHealthReformBlog.com). Get to know all of the Lockton Benefit Group experts on YouTube (look for Lockton Companies we have our own channel).

3 Lockton Health Reform Employee Communications Toolkit INTRODUCTION... 5 INDIVIDUAL MANDATE LETTER/MEMO... 6 POWERPOINT SLIDES... 8 POSTCARD POSTER WHAT ARE EHB AND MEC? LETTER/MEMO POWERPOINT SLIDES POSTCARD POSTER PUBLIC INSURANCE EXCHANGES INSTRUCTIONS FOR PROVIDING MODEL NOTICES REGARDING PUBLIC HEALTH INSURANCE MARKETPLACES/EXCHANGES MODEL NOTICE FOR COMPANIES WITH PLANS... MODEL NOTICE FOR COMPANIES WITH PLANS (SPANISH) MODEL NOTICE FOR COMPANIES WITHOUT PLANS... MODEL NOTICE FOR COMPANIES WITHOUT PLANS (SPANISH) POWERPOINT SLIDES POSTCARD POSTER POTENTIAL OPTIONS FOR 2014 LETTER/MEMO POWERPOINT SLIDES POSTCARDS (2) POSTERS (2) WHAT S HAPPENING TO THE CURRENT PLAN LETTER/MEMO POWERPOINT SLIDES POSTCARDS (3) POSTERS (3)... 77

4 Lockton Health Reform Employee Communications Toolkit WHAT DOES AN EMPLOYEE NEED TO DO? LETTER/MEMO POWERPOINT SLIDES POSTCARD POSTER EMPLOYEES WHO DON T HAVE COVERAGE LETTER/MEMO POWERPOINT SLIDES POSTCARD POSTER INFORMATION FOR VARIABLE-HOUR EMPLOYEES LETTER/MEMO POWERPOINT SLIDES POSTCARD POSTER GLOSSARY LETTER/MEMO POWERPOINT SLIDES FREQUENTLY ASKED QUESTIONS LETTER/MEMO POWERPOINT SLIDES TIMELINE LETTER/MEMO POWERPOINT SLIDES LETTER/MEMO FROM HR TO SENIOR MANAGEMENT LETTER/MEMO FROM HR TO CEO

5 Lockton Health Reform Employee Communications Toolkit INTRODUCING THE LOCKTON HEALTH REFORM EMPLOYEE COMMUNICATIONS TOOLKIT At Lockton, we know the challenges of health reform can be daunting. And keeping your employees informed with easy-to-digest communications can be time-consuming. So with this Health Reform Employee Communications Toolkit, we are happy to provide you with the foundations of an employee communications plan. We hope it will both ease your administrative burden and help keep your employees informed about the basic tenets of the health reform law. This toolkit was designed for maximum flexibility and ease of customization. Add your logo, change the font, insert your company name. There are more than a dozen individual employee communication pieces, many of which are available in multiple formats. Formats include: Standard Word documents for use as an , memo, or letter. Posters for display in a break room or lunchroom. Postcards for mailing to employees homes. PowerPoint slides for use in presentations. Spanish versions of these communications will soon be available. These communications were reviewed by our Compliance Services team. We will periodically review and refresh the content, to keep up with the implementation of the health reform law. Video formats are under development. To share enhancement ideas, please contact your Lockton Account Service Team or Jeannie Wilcox, Director of Communications.

6 Health Reform: Individual Mandate Summary January 1, 2014, the health reform law s individual mandate takes effect. What does the individual mandate mean to you? This part of the law requires most individuals to have health insurance. If you do not have health insurance, you will pay a penalty. If you have a family, your family members must also have health insurance. What health insurance plans meet the requirements for the individual mandate? Most employer group health plans, including <Company Name> s plan An individual health insurance policy obtained through a public health insurance marketplace/exchange or elsewhere A government plan such as Medicare, Medicaid, Children s Health Insurance Program (CHIP), TRICARE, or veterans coverage Student health coverage Medicare Advantage plan State high-risk pool coverage Coverage for non-u.s. citizens provided by another country Refugee medical assistance provided by Administration for Children and Families Coverage for AmeriCorps volunteers Does <Your Company> s group health plan meet the requirement? Yes, coverage under our group health plan meets the individual mandate requirement, therefore you have no penalty if you enroll under our plan. OR No, coverage under our company s plan does not meet the individual mandate requirement. <insert options for employees here> ANY STREET WEST, TOWNSVILLE, ST 54321

7 What is the penalty for not complying with the law? If you do not enroll in and maintain insurance for yourself and your dependents you may be required to pay an annual penalty (prorated for the number of months of the year during which you don t have coverage). Penalty YEAR ADULT CHILD* FAMILY* MAXIMUM PENALTY* 2014 $95 per adult $47.50 per child $285 1 percent of family income OR 2015 $325 per adult $ per child $975 2 percent of family income 2016 $695 per adult $ per child $2, percent of family income *Penalty is the greater of the dollar amount or percentage of income. You may be exempt from a penalty if any of the following apply: You cannot afford coverage (would have to pay more than eight percent of annual household income to purchase health insurance after taking into account any employer contributions and subsidies). Your income is below the tax-filing threshold. You qualify for a hardship exemption. You experience a gap in coverage of less than three consecutive months in one calendar year. You are a member of religious group that objects to coverage on religious principles. You are a member of non-profit religious organization that shares medical costs. You are in prison. You are a non-u.s. citizen. You are a Native American tribe member. If you think you qualify for an exemption, please visit for more information ANY STREET WEST, TOWNSVILLE, ST 54321

8 Health Reform The Individual Mandate

9 Summary January 1, 2014, the health reform law s individual mandate takes effect. 2

10 What Does the Individual Mandate Mean to You? Requires most individuals to have health insurance If you do not, you will pay a penalty Family members must have health insurance too 3

11 What Health Insurance Plans Meet the Requirements for the Individual Mandate? Most employer group health plans, including <Company Name s> plan An individual health insurance policy obtained through a public health insurance marketplace/exchange or elsewhere A government plan such as Medicare, Medicaid, Children s Health Insurance Program (CHIP), TRICARE, or veterans coverage Student health coverage Medicare Advantage plan State high-risk pool coverage Coverage for non-u.s. citizens provided by another country Refugee medical assistance provided by Administration for Children and Families Coverage for AmeriCorps volunteers 4

12 Does <Your Company> s Group Health Plan Meet the Requirement? Yes, coverage under our group health plan meets the individual mandate requirement, therefore you have no penalty if you enroll under our plan. OR No, coverage under our company s plan does not meet the individual mandate requirement. <Insert options for employees here.> 5

13 What is the Penalty for Not Complying with the Law? You (and/or your dependents) may be required to pay an annual penalty. Prorated for the number of months of the year during which you don t have coverage 6

14 Penalty Penalty YEAR ADULT CHILD* FAMILY* MAXIMUM PENALTY* 2014 $95 per adult $47.50 per child $285 1 percent of family income 2015 $325 per adult $ per child $975 2 percent of family income OR 2016 $695 per adult $ per child $2, percent of family income *Penalty is the greater of the dollar amount or percentage of income. 7

15 You May be Exempt From a Penalty if Any of the Following Apply: You cannot afford coverage (would have to pay more than eight percent of annual household income to purchase health insurance after taking into account any employer contributions and subsidies). Your income is below the tax-filing threshold. You qualify for a hardship exemption. You experience a gap in coverage of less than three consecutive months in one calendar year. You are: A member of religious group that objects to coverage on religious principles. A member of nonprofit religious organization that shares medical costs. In prison. A non U.S. citizen. A Native American tribe member. If you think you qualify for an exemption, please visit for more information. 8

16 Did You Know? Here s Information About the Health Reform Law

17 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX The health reform law s individual mandate takes effect January 1, What s that mean to YOU? This part of the law requires most people to have health insurance. If you don t, you ll pay a penalty. If you have a family, your family members must have health insurance too. To learn more, ask our HR Department. <Contact Info>

18 Did You Know? The health reform law s individual mandate takes effect January 1, What s that mean to YOU? This part of the law requires most people to have health insurance. If you don t, you ll pay a penalty. If you have a family, your family members must have health insurance too. To learn more, ask our HR Department

19 What are Essential Health Benefits and Minimum Essential Coverage? You have been hearing about the health reform law, much of which takes effect January 1, Two key terms you may hear a lot about are Minimum Essential Coverage and Essential Health Benefits. Although they sound similar, each has a very different meaning and implication under health reform. Minimum Essential Coverage (MEC) is the coverage needed to satisfy the law s individual mandate (the law requires almost everyone in America to have health insurance or pay a fine). Your companysponsored health coverage is MEC. So you will not be subject to the individual mandate penalty for any month for which you are enrolled in the company-sponsored health plan. Essential Health Benefits (EHB) are 10 categories of benefits that, if offered under your companysponsored health plan, must be covered with no annual or lifetime dollar limits: 1. Ambulatory patient services 2. Emergency services 3. Hospitalization 4. Maternity and newborn care 5. Mental health and substance abuse disorder services, including behavioral health treatment 6. Prescription drugs 7. Rehabilitative and habilitative services and devices 8. Laboratory services 9. Preventive and wellness services and chronic disease management 10. Pediatric services, including oral and vision care A common assumption is that minimum essential coverage must include essential health benefits. But the two concepts are not directly related. Just because coverage is minimum essential coverage does not automatically mean it must include essential health benefits. As it happens, however, your companysponsored health plan covers <all><nearly all> essential health benefits ANY STREET WEST, TOWNSVILLE, ST 54321

20 Health Reform What Are Essential Health Benefits and Minimum Essential Coverage?

21 Two Terms, Very Different Two key terms: Minimum Essential Coverage (MEC) Essential Health Benefits (EHB) Sound similar, but each has a very different meaning and implication under health reform. 2

22 Minimum Essential Coverage (MEC) Minimum Essential Coverage (MEC) Coverage needed to satisfy the law s individual mandate. Your company-sponsored health coverage is minimum essential coverage. You will not be subject to the individual mandate penalty for any month in which you are enrolled in the company-sponsored health plan. 3

23 Essential Health Benefits (EHB) Essential Health Benefits (EHB) Ten categories of benefits that, if offered under your company-sponsored health plan, must be covered with no annual or lifetime dollar limits: 1. Ambulatory patient services 2. Emergency services 3. Hospitalization 4. Maternity and newborn care 5. Mental health and substance abuse disorder services, including behavioral health treatment 6. Prescription drugs 7. Rehabilitative and habilitative services and devices 8. Laboratory services 9. Preventive and wellness services and chronic disease management 10. Pediatric services, including oral and vision care 4

24 Common Assumption About MEC/EHB A common assumption is that minimum essential coverage must include essential health benefits. The two concepts are not directly related. Just because coverage is minimum essential coverage does not automatically mean it must include essential health benefits. However, your company-sponsored health plan covers <all><nearly all> essential health benefits. 5

26 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX WHAT S THE DIFFERENCE BETWEEN MEC & EHB? Heard about the health reform law-related terms EHB and MEC and wondered what they meant? Here you go! Minimum Essential Coverage (MEC) is the coverage you need to satisfy the health reform law s individual mandate. The law requires almost everyone in America to have health insurance or pay a fine. Your companysponsored health coverage is minimum essential coverage. Essential Health Benefits (EHB) are 10 categories of benefits that, if offered under your company-sponsored health plan, must be covered with no annual or lifetime dollar limits. To learn more, ask our HR Department. <Contact Info>

27 Did You Know? WHAT S THE DIFFERENCE BETWEEN MEC & EHB? Heard about the health reform law-related terms EHB and MEC and wondered what they meant? Here you go! Minimum Essential Coverage (MEC) is the coverage you need to satisfy the health reform law s individual mandate. The law requires almost everyone in America to have health insurance or pay a fine. Your company-sponsored health coverage is minimum essential coverage. Essential Health Benefits (EHB) are 10 categories of benefits that, if offered under your company-sponsored health plan, must be covered with no annual or lifetime dollar limits. These include: Ambulatory patient services; Emergency services; Hospitalization; Maternity and newborn care; Mental health and substance abuse disorder services, including behavioral health treatment; Prescription drugs; Rehabilitative and habilitative services and devices; Laboratory services; Preventive and wellness services and chronic disease management; and Pediatric services, including oral and vision care. To learn more, ask our HR Department

28 Public Health Insurance Marketplaces/Exchanges Instructions for Providing Model Notices Regarding Public Health Insurance Marketplaces/Exchanges The obligation to inform employees about the public health insurance exchanges applies to employers subject to the Fair Labor Standards Act (FLSA). Please see the Lockton Health Reform Advisory Practice Alert from May 15, 2013, for more information, including: Who gives and receives the notice What must the notice include, and When and how employers must supply the notice Please also see the Lockton Health Reform Advisory Practice Alert from August 9, 2013, for answers to frequently asked questions about public exchange (marketplace) communications.

29 New Health Insurance Marketplace Coverage Options and Your Health Coverage Form Approved OMB No (expires ) PART A: General Information When key parts of the health care law take effect in 2014, there will be a new way to buy health insurance: the Health Insurance Marketplace. To assist you as you evaluate options for you and your family, this notice provides some basic information about the new Marketplace and employment based health coverage offered by your employer. What is the Health Insurance Marketplace? The Marketplace is designed to help you find health insurance that meets your needs and fits your budget. The Marketplace offers "one-stop shopping" to find and compare private health insurance options. You may also be eligible for a new kind of tax credit that lowers your monthly premium right away. Open enrollment for health insurance coverage through the Marketplace begins in October 2013 for coverage starting as early as January 1, Can I Save Money on my Health Insurance Premiums in the Marketplace? You may qualify to save money and lower your monthly premium, but only if your employer does not offer coverage, or offers coverage that doesn't meet certain standards. The savings on your premium that you're eligible for depends on your household income. Does Employer Health Coverage Affect Eligibility for Premium Savings through the Marketplace? Yes. If you have an offer of health coverage from your employer that meets certain standards, you will not be eligible for a tax credit through the Marketplace and may wish to enroll in your employer's health plan. However, you may be eligible for a tax credit that lowers your monthly premium, or a reduction in certain cost-sharing if your employer does not offer coverage to you at all or does not offer coverage that meets certain standards. If the cost of a plan from your employer that would cover you (and not any other members of your family) is more than 9.5% of your household income for the year, or if the coverage your employer provides does not meet the "minimum value" standard set by the Affordable Care Act, you may be eligible for a tax credit. 1 Note: If you purchase a health plan through the Marketplace instead of accepting health coverage offered by your employer, then you may lose the employer contribution (if any) to the employer-offered coverage. Also, this employer contribution -as well as your employee contribution to employer-offered coverage- is often excluded from income for Federal and State income tax purposes. Your payments for coverage through the Marketplace are made on an after-tax basis. How Can I Get More Information? For more information about your coverage offered by your employer, please check your summary plan description or contact. The Marketplace can help you evaluate your coverage options, including your eligibility for coverage through the Marketplace and its cost. Please visit HealthCare.gov for more information, including an online application for health insurance coverage and contact information for a Health Insurance Marketplace in your area. 1 An employer-sponsored health plan meets the "minimum value standard" if the plan's share of the total allowed benefit costs covered by the plan is no less than 60 percent of such costs.

30 PART B: Information About Health Coverage Offered by Your Employer This section contains information about any health coverage offered by your employer. If you decide to complete an application for coverage in the Marketplace, you will be asked to provide this information. This information is numbered to correspond to the Marketplace application. 3. Employer name 4. Employer Identification Number (EIN) 5. Employer address 6. Employer phone number 7. City 8. State 9. ZIP code 10. Who can we contact about employee health coverage at this job? 11. Phone number (if different from above) 12. address Here is some basic information about health coverage offered by this employer: As your employer, we offer a health plan to: All employees. Some employees. Eligible employees are: With respect to dependents: We do offer coverage. Eligible dependents are: We do not offer coverage. If checked, this coverage meets the minimum value standard, and the cost of this coverage to you is intended to be affordable, based on employee wages. ** Even if your employer intends your coverage to be affordable, you may still be eligible for a premium discount through the Marketplace. The Marketplace will use your household income, along with other factors, to determine whether you may be eligible for a premium discount. If, for example, your wages vary from week to week (perhaps you are an hourly employee or you work on a commission basis), if you are newly employed mid-year, or if you have other income losses, you may still qualify for a premium discount. If you decide to shop for coverage in the Marketplace, HealthCare.gov will guide you through the process. Here's the employer information you'll enter when you visit HealthCare.gov to find out if you can get a tax credit to lower your monthly premiums.

31 The information below corresponds to the Marketplace Employer Coverage Tool. Completing this section is optional for employers, but will help ensure employees understand their coverage choices but will help ensure employees understand their coverage choices. 13. Is the employee currently eligible for coverage offered by this employer, or will the employee be eligible in the next 3 months? Yes (Continue) 13a. If the employee is not eligible today, including as a result of a waiting or probationary period, when is the employee eligible for coverage? No (STOP and return this form to employee) (mm/dd/yyyy) (Continue) 14. Does the employer offer a health plan that meets the minimum value standard*? Yes (Go to question 15) No (STOP and return form to employee) 15. For the lowest-cost plan that meets the minimum value standard* offered only to the employee (don't include family plans): If the employer has wellness programs, provide the premium that the employee would pay if he/ she received the maximum discount for any tobacco cessation programs, and didn't receive any other discounts based on wellness programs. a. How much would the employee have to pay in premiums for this plan? $ b. How often? Weekly Every 2 weeks Twice a month Monthly Quarterly Yearly If the plan year will end soon and you know that the health plans offered will change, go to question 16. If you don't know, STOP and return form to employee. 16. What change will the employer make for the new plan year? Employer won't offer health coverage Employer will start offering health coverage to employees or change the premium for the lowest-cost plan available only to the employee that meets the minimum value standard.* (Premium should reflect the discount for wellness programs. See question 15.) a. How much will the employee have to pay in premiums for that plan? $ b. How often? Weekly Every 2 weeks Twice a month Monthly Quarterly Yearly Date of change (mm/dd/yyyy): An employer-sponsored health plan meets the "minimum value standard" if the plan's share of the total allowed benefit costs covered by the plan is no less than 60 percent of such costs (Section 36B(c)(2)(C)(ii) of the Internal Revenue Code of 1986)

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35 New Health Insurance Marketplace Coverage Options and Your Health Coverage Form Approved OMB No (expires ) PART A: General Information When key parts of the health care law take effect in 2014, there will be a new way to buy health insurance: the Health Insurance Marketplace. To assist you as you evaluate options for you and your family, this notice provides some basic information about the new Marketplace. What is the Health Insurance Marketplace? The Marketplace is designed to help you find health insurance that meets your needs and fits your budget. The Marketplace offers "one-stop shopping" to find and compare private health insurance options. You may also be eligible for a new kind of tax credit that lowers your monthly premium right away. Open enrollment for health insurance coverage through the Marketplace begins in October 2013 for coverage starting as early as January 1, Can I Save Money on my Health Insurance Premiums in the Marketplace? You may qualify to save money and lower your monthly premium, but only if your employer does not offer coverage, or offers coverage that doesn't meet certain standards. The savings on your premium that you're eligible for depends on your household income. Does Employer Health Coverage Affect Eligibility for Premium Savings through the Marketplace? Yes. If you have an offer of health coverage from your employer that meets certain standards, you will not be eligible for a tax credit through the Marketplace and may wish to enroll in your employer's health plan. However, you may be eligible for a tax credit that lowers your monthly premium, or a reduction in certain cost-sharing if your employer does not offer coverage to you at all or does not offer coverage that meets certain standards. If the cost of a plan from your employer that would cover you (and not any other members of your family) is more than 9.5% of your household income for the year, or if the coverage your employer provides does not meet the "minimum value" standard set by the Affordable Care Act, you may be eligible for a tax credit. 1 Note: If you purchase a health plan through the Marketplace instead of accepting health coverage offered by your employer, then you may lose the employer contribution (if any) to the employer-offered coverage. Also, this employer contribution -as well as your employee contribution to employer-offered coverage- is often excluded from income for Federal and State income tax purposes. Your payments for coverage through the Marketplace are made on an after-tax basis. How Can I Get More Information? The Marketplace can help you evaluate your coverage options, including your eligibility for coverage through the Marketplace and its cost. Please visit HealthCare.gov for more information, including an online application for health insurance coverage and contact information for a Health Insurance Marketplace in your area. 1 An employer-sponsored health plan meets the "minimum value standard" if the plan's share of the total allowed benefit costs covered by the plan is no less than 60 percent of such costs.

36 PART B: Information About Health Coverage Offered by Your Employer This section contains information about any health coverage offered by your employer. If you decide to complete an application for coverage in the Marketplace, you will be asked to provide this information. This information is numbered to correspond to the Marketplace application. 3. Employer name 4. Employer Identification Number (EIN) 5. Employer address 6. Employer phone number 7. City 8. State 9. ZIP code 10. Who can we contact at this job? 11. Phone number (if different from above) 12. address You are not eligible for health insurance coverage through this employer. You and your family may be able to obtain health coverage through the Marketplace, with a new kind of tax credit that lowers your monthly premiums and with assistance for outof-pocket costs.

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39 Health Reform Public Health Insurance Marketplaces/Exchanges

40 Please read this entire communication before distributing to ensure it matches your company s strategy.

41 Information About Health Insurance Marketplaces/Exchanges When key parts of the health reform law take effect January 1, 2014, you will have a new way to get health insurance. Public health insurance marketplace/exchange Compare available plan options based on price, benefits, and quality. Each state is required by the law to have a marketplace available for benefits coverage in If a state is not prepared to operate a marketplace by that date, the federal government intends to operate the marketplace for the state s residents <Insert optional text here regarding specific open enrollment and effective dates for the marketplace in the relevant state(s)> 3

42 Potential Financial Assistance in the Marketplace Financial assistance in the form of advance tax credits may be available (to purchase a health plan) If household income is >100 percent, but <400 percent of federal poverty level, and you meet other requirements, you might be eligible for a tax credit Tax credit amounts vary based on household income. If your income is at or below 133 percent of the federal poverty level, you might be eligible for Medicaid. Cost-sharing subsidies may also be available to you Financial assistance in paying out-of-pocket plan costs like deductibles, copayments, etc. More information about tax credits and subsidies: 4

43 <Optional Text> Employers that will offer NO coverage After careful consideration, <COMPANY NAME> has decided not to offer health insurance. A premium tax credit may be available to you through the insurance marketplace serving your state. Enter your information into the subsidy calculator to determine if you are eligible for a subsidy. Employers that WILL offer coverage <COMPANY NAME> will offer health insurance to all employees working 30 or more hours per week. In compliance with the health reform law, the <COMPANY NAME> medical plan(s) are considered both qualifying and affordable to you, which means you will not qualify for a tax credit to help you purchase health insurance through the marketplace. Thus, if you purchase coverage through the marketplace, you will have to pay the full cost of the coverage yourself. Employers that offer coverage but want to mention the marketplace <COMPANY NAME> will offer health insurance to all employees working 30 or more hours per week. You also have the option to purchase insurance through the health insurance marketplace, and you may be eligible for a tax credit if our coverage requires you to spend more than 9.5 percent of your household income for employee-only coverage, or is not considered adequately robust under the health reform law (note, however, that we believe our employee-only coverage rate does not require you to pay more than 9.5 percent of your household income, and is considered adequate under the health reform law). Please visit for more information. 5

44 <Optional Text> Could apply to any employer <COMPANY NAME> provides you the option to pay for your health insurance on a pre-tax basis, which in turn lowers your taxable income. Please be aware that coverage purchased through the marketplace is paid for on a post-tax basis. Non-calendar plan year employers who will allow one-time, mid-year changes to a health insurance marketplace <COMPANY NAME> will provide you with a one-time opportunity to drop coverage through our health plan and elect coverage through the health insurance marketplace, if you choose to do that. Your next opportunity to elect coverage through the health insurance marketplace will be during an open enrollment period. <OPTIONAL TEXT FOR CLOSING> We realize that selecting the right health insurance is a complex decision, and we will continue to update you with more information about the marketplace as it becomes available. If you have questions about your benefit options or the health reform law, please contact Human Resources or visit 6

45 Frequently Asked Questions Who can purchase coverage through the marketplace? Anyone can purchase coverage through the marketplace. Who is eligible for a financial assistance to purchase coverage through the marketplace? Financial assistance may be available to people who are not offered qualifying and affordable coverage through their employers, and not enrolled in any employer-based plan. If your household income is between 100 and 400 percent of the federal poverty level, you might be eligible for financial assistance. Financial assistance amounts vary based on household income. If your income is at or below 133 percent of the federal poverty level, you might be eligible for Medicaid. What type of plans will be offered through the marketplace? Every health insurance plan in the marketplace will offer comprehensive coverage fulfilling the health reform law s individual mandate. 7

46 Frequently Asked Questions Is coverage through the marketplace free? No. Financial assistance in the form of tax credits may be available to people who are not offered qualifying and affordable coverage through their employer, are not enrolled in an employer-based health plan, and whose income is less than 400 percent of the federal poverty level. Individuals and families with incomes at or below 133 percent of the federal poverty level may be eligible for Medicaid, and won t qualify for financial assistance to purchase an insurance policy in a Marketplace. Health insurance plans purchased through the marketplace are paid for on a post-tax basis. How can I buy coverage through the marketplace? You can apply for and enroll in coverage online, in person, by phone, fax, or mail. My employer offers family coverage, and the employee-only tier of coverage is considered qualifying and affordable. Is my spouse eligible for financial assistance through the marketplace? Generally, no. If an employer offers family or employee-plus-spouse coverage, and the employee-only tier of coverage is considered both qualifying and affordable, your spouse does not qualify for financial assistance in the marketplace. This goes for other of your dependents (such as children) as well. 8

48 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX When key parts of the health reform law take effect January 1, 2014, you will have a new way to get health insurance. You can shop for coverage through a public health insurance marketplace or exchange. Each state will have one, and this marketplace will help you compare available plan options, based on price, benefits, and quality. To learn more, ask our HR Department. <Contact Info>

49 Did You Know? When key parts of the health reform law take effect January 1, 2014, you will have a new way to get health insurance. You can shop for coverage through a public health insurance marketplace or exchange. Each state will have one, and this marketplace will help you compare available plan options, based on price, benefits, and quality. To learn more, ask our HR Department

50 Options to Purchase Health Insurance January 2014 On January 1, 2014, a key component of the health reform law will take effect: Everyone in the U.S. (with a few exceptions) will be required to have health insurance. [FOR EMPLOYER WITH QUALIFYING AND AFFORDABLE PLAN] <COMPANY NAME> will continue to offer health insurance for eligible employees. This coverage meets all of the health reform law requirements to satisfy your individual mandate under the reform law. We hope to keep offering this benefit as a valuable part of your total compensation. In 2014, you will also have other options to purchase health insurance, but because we offer you coverage that satisfies all the health reform requirements, you will not qualify for any federal assistance to purchase an individual or family policy on the open market. These other options include: Insurance policies via a public health insurance marketplace/exchange Private health insurance marketplaces/exchanges Insurance policies directly from health insurers and brokers Please see the details below. Options to Purchase Health Insurance Public health insurance marketplaces/exchanges You can shop for coverage in an online public health insurance marketplace/exchange and compare available policies based on price, benefits, and quality. Each state is required to have an online public marketplace available for health insurance coverage in 2014 (if a state does not establish one, the federal government will operate an exchange for the state s residents). Because <COMPANY NAME> offers you coverage that satisfies all requirements under the health reform law, you and your dependents will not qualify for federal financial assistance (premium tax credits) for any coverage you purchase on the public exchange. Private marketplaces/exchanges A variety of private exchanges will serve as marketplaces where you can compare health plans and buy coverage. For example, an insurance company might create a private exchange that serves some of the same functions as a public exchange, but cannot offer federal financial assistance to individuals purchasing coverage. In addition, some health insurance companies are opening retail stores where you can shop for a policy, check on claims and get oneon-one health education coaching ANY STREET WEST, TOWNSVILLE, ST 54321

51 Health insurers and brokers Health insurance companies will sell plans directly to you through their own websites and call centers. In addition, even though you will be able to shop for yourself through the exchanges, you can enlist the assistance of an insurance agent or broker. OR [FOR EMPLOYER WITHOUT PLAN] You will have many options for finding and enrolling in the right coverage, but the law does not require you to get health insurance coverage differently than you do today. For example, if you currently have coverage as a dependent on your spouse s or parent s employer s plan, the regulations do not require you to make any changes. As long as you have minimum essential coverage <link to that document> to meet regulation requirements, you will not be subject to the individual mandate penalty. In 2014 you will have the following options to purchase health insurance: Public health insurance marketplace/exchange Private health insurance marketplace/exchange Insurance policies directly from health insurers and brokers Please see the details below. Options to Purchase Health Insurance Public health insurance marketplaces/exchanges You can shop for coverage in an online public health insurance marketplace/exchange and compare available policies based on price, benefits, and quality. Each state is required to have an online public marketplace available for health insurance coverage in 2014 (if a state does not establish one, the federal government will operate an exchange for the state s residents). Private marketplaces/exchanges A variety of private exchanges will serve as marketplaces where you can compare health plans and buy coverage. For example, an insurance company might create a private exchange that serves some of the same functions as a public exchange, but cannot offer federal financial assistance to individuals purchasing coverage. In addition, some health insurance companies are opening retail stores where you can shop for a policy, check on claims and get oneon-one health education coaching. Health insurers and brokers Health insurance companies will sell plans directly to you through their own websites and call centers. In addition, even though you will be able to shop for yourself through the exchanges, you can enlist the assistance of an insurance agent or broker ANY STREET WEST, TOWNSVILLE, ST 54321

52 Health Reform Options to Purchase Health Insurance January 2014

53 Please read this entire communication before distributing to determine which choice matches your company s strategy.

54 For Employer With Qualifying and Affordable Plan <COMPANY NAME> will continue to offer health insurance for eligible employees. Satisfies your individual mandate under the reform law. In 2014 you will have other options to purchase health insurance No federal assistance to purchase an individual or family policy on the open market 3

55 For Employer With Qualifying and Affordable Plan Other options include: Public health insurance marketplace/exchange Compare available policies based on price, benefits, and quality Each state is required to have an online public marketplace available in 2014 If a state does not establish one, the federal government will operate an exchange for the state s residents Because <COMPANY NAME> offers you coverage that satisfies all requirements under the health reform law, you and your dependents will not qualify for federal financial assistance (premium tax credits) for any coverage you purchase on the public exchange Private health insurance marketplaces/exchanges A variety of private exchanges will serve as marketplaces where you can compare health plans and buy coverage Directly from health insurers and brokers Health insurance companies will sell plans directly to you You can also enlist the assistance of an insurance agent or broker 4

56 ---OR---For Employer Without Plan You will have many options for finding and enrolling in the right coverage Law does not require you to get health insurance coverage differently than you do today For example, if you currently have coverage as a dependent on your spouse s or parent s employer s plan, the regulations do not require you to make any changes As long as you have minimum essential coverage <link to that document> to meet regulation requirements, no individual mandate penalty 5

57 For Employer Without Plan Options to purchase health insurance in 2014 Public health insurance marketplace/exchange Compare available policies based on price, benefits, and quality Each state is required to have an online public marketplace available in 2014 If a state does not establish one, the federal government will operate an exchange for the state s residents Private health insurance marketplaces/exchanges A variety of private exchanges will serve as marketplaces where you can compare health plans and buy coverage Directly from health insurers and brokers Health insurance companies will sell plans directly to you You can also enlist the assistance of an insurance agent or broker 6

58 Did You Know? For Employer With Qualifying and Affordable Plan Here s Information About the Health Reform Law

59 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX On January 1, 2014, a key component of the health reform law will take effect: Everyone in the U.S. (with a few exceptions) will be required to have health insurance. We will continue to offer health insurance for eligible employees. You will also have other options to purchase health insurance, but because we offer you coverage that satisfies all the health reform requirements, you will not qualify for any federal assistance to purchase an individual or family policy on the open market. Your other options include: Insurance policies via a public health insurance marketplace/exchange Private health insurance marketplaces/exchanges Insurance policies directly from health insurers and brokers To learn more, ask our HR Department.<Contact Info>

60 Did You Know? For Employer Without Plan Here s Information About the Health Reform Law

61 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX In 2014, you will have many options for finding and enrolling in the right coverage, but the law does not require you to get health insurance coverage differently than you do today. For example, if you currently have coverage as a dependent on your spouse s or parent s employer s plan, the regulations do not require you to make any changes. You will have other options, which include: Insurance policies via a public health insurance marketplace/exchange Private health insurance marketplaces/exchanges Insurance policies directly from health insurers and brokers To learn more, ask our HR Department. <Contact Info>

62 Did You Know? For Employer With Qualifying and Affordable Plan On January 1, 2014, a key component of the health reform law will take effect: Everyone in the U.S. (with a few exceptions) will be required to have health insurance. We will continue to offer health insurance for eligible employees. You will also have other options to purchase health insurance, but because we offer you coverage that satisfies all the health reform requirements, you will not qualify for any federal assistance to purchase an individual or family policy on the open market. Your other options include: Insurance policies via a public health insurance marketplace/exchange Private health insurance marketplaces/exchanges Insurance policies directly from health insurers and brokers To learn more, ask our HR Department

63 For Employer Without Plan Did You Know? In 2014 you will have many options for finding and enrolling in the right coverage, but the law does not require you to get health insurance coverage differently than you do today. For example, if you currently have coverage as a dependent on your spouse s or parent s employer s plan, the regulations do not require you to make any changes. Your will have other options, which include: Insurance policies via a public health insurance marketplace/exchange Private health insurance marketplaces/exchanges Insurance policies directly from health insurers and brokers To learn more, ask our HR Department

64 What s Happening To The Current Plan? CHOOSE ONE OPTION ONE: <Company Name> will continue to offer a health plan to our employees. The health reform law is changing the healthcare landscape as we know it. You and your dependents are required to have health insurance beginning January 1, 2014, which will coincide with coverage availability through the public health insurance marketplaces/exchanges. Some of you may be worried that <Company Name> will force our employees to the marketplace/exchange, but let us assure you, we have no plans to terminate the <Company Name> health plan (but of course reserve the right to consider that later). We expect health plan costs to rise. With the requirements of health reform, we expect the cost of the health plan to increase. Included in the health reform law are fees, taxes, and mandates that have direct or indirect impacts on our overall plan costs. While we cannot say exactly what the increase will be, we predict a(n) <range of # to # percent>. OPTIONAL <Company Name> will share the additional costs with our employees. This may mean some changes to the health plan offering. In order to manage the expected cost increases, we may make adjustments to the health plan offering. We will supply you with information on any changes if they occur. OPTION TWO: <Company Name> may not offer a health plan to all employees (e.g., those working fewer than 30 hours). The health reform law is changing the healthcare landscape as we know it. You and your dependents are required to have health insurance beginning January 1, 2014, which will coincide with coverage availability through the public health insurance marketplaces/exchanges. <COMPANY NAME> will offer health insurance to eligible employees working 30 or more hours per week. You also have the option to purchase insurance through the public health insurance marketplace/exchange, and you may be eligible for federal financial assistance. Please visit for more details. We will also provide more information as it becomes available ANY STREET WEST, TOWNSVILLE, ST 54321

65 We expect health plan costs to rise. With the requirements of health reform, we expect the cost of the health plan to increase. Included in the health reform law are fees, taxes, and mandates that have direct or indirect impacts on our overall plan costs. While we cannot say exactly what the increase will be, we predict a(n) <range of # to # percent>. OPTIONAL <Company Name> will share the additional costs with our employees. This may mean some changes to the health plan offering. In order to manage the expected cost increases, we may make adjustments to the health plan offering. We will supply you with information on any changes if they occur. OPTION THREE: <Company Name> will not offer a health plan to our employees in The health reform law is changing the healthcare landscape as we know it. You and your dependents are required to have health insurance beginning January 1, 2014, which will coincide with coverage availability through the public health insurance marketplaces/exchanges. Based on the increase in projected cost, an employer-sponsored health plan will not be offered by <Company Name> in However, you have many options for obtaining healthcare. For example, you may be able to obtain coverage through a: Public health insurance marketplace/exchange Government program such as Medicare, Medicaid, Children s Health Insurance Program (CHIP), TRICARE, or veterans coverage Student health coverage Medicare Advantage plan State high-risk pool coverage Plan for non-u.s. citizens, provided by another country Refugee medical assistance provided by Administration for Children and Families Plan for AmeriCorps volunteers OPTIONAL <Company Name> will provide <these services> to help ensure you reach your personal insurance coverage goals ANY STREET WEST, TOWNSVILLE, ST 54321

66 Health Reform What s Happening to Our Current Health Plan?

67 Please choose the applicable verbiage.

68 Option One <Company Name> will continue to offer a health plan to our employees. The health reform law is changing the healthcare landscape. You and your dependents are required to have health insurance beginning January 1, Same time as availability of public health insurance marketplaces/exchanges. We have no plans to terminate the <Company Name> health plan (but reserve the right to consider that later). We expect health plan costs to rise. With the requirements of health reform, we expect the cost of the health plan to increase. Included in the law are fees, taxes, and mandates. We predict a(n) <range of # to # percent> increase. OPTIONAL <Company Name> will share the additional costs with our employees. This may mean some changes to the health plan offering. We may make adjustments to the health plan offering. We will supply you with information on any changes, if they occur. 3

69 Option Two <Company Name> may not offer a health plan to all employees (e.g., those working fewer than 30 hours). The health reform law is changing the healthcare landscape. You and your dependents are required to have health insurance beginning January 1, <COMPANY NAME> will offer health insurance to eligible employees working 30 or more hours per week. You also have the option to purchase insurance through the public health insurance marketplace/exchange. You may be eligible for federal financial assistance. Please visit for more details. We will also provide more information as it becomes available. We expect health plan costs to rise. With the requirements of health reform, we expect the cost of the health plan to increase. Included in the law are fees, taxes, and mandates. We predict a(n) <range of # to # percent> increase. OPTIONAL <Company Name> will share the additional costs with our employees. This may mean some changes to the health plan offering. We may make adjustments to the health plan offering. We will supply you with information on any changes, if they occur. 4

70 Option Three <Company Name> will not offer a health plan to our employees in 2014 based on the increase projected. The health reform law is changing the healthcare landscape. You and your dependents are required to have health insurance beginning January 1, Same time as coverage availability through public health insurance marketplaces/ exchanges. Many options for obtaining healthcare. Public health insurance marketplace/exchange. Government program such as Medicare, Medicaid, Children s Health Insurance Program (CHIP), TRICARE, or the VA. Student health coverage. Medicare Advantage plan. State high-risk pool coverage. Plan for non-u.s. citizens, provided by another country. Refugee medical assistance provided by Administration for Children and Families. Plan for AmeriCorps volunteers. OPTIONAL <Company Name> will provide <these services> to help ensure you reach your personal insurance coverage goals. 5

72 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX We will continue to offer a health plan to our employees. However, we do expect health plan costs to rise. This may mean some changes to the health plan offering. In order to manage the expected cost increases, we may make adjustments to the health plan offering. We will supply you with information on any changes, if they occur.

74 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX We may not offer a health plan to all employees (e.g., those working fewer than 30 hours). You also have the option to purchase insurance through the public health insurance marketplace/exchange, and you may be eligible for federal financial assistance. However, we do expect health plan costs to rise. This may mean some changes to the health plan offering. In order to manage the expected cost increases, we may make adjustments to the health plan offering. We will supply you with information on any changes, if they occur.

76 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX Based on the increase in projected cost in 2014, we will not offer an employer-sponsored health plan. However, you have many options for obtaining healthcare. For example, you may be able to obtain coverage through a: Public health insurance marketplace/exchange Government program such as Medicare, Medicaid, Children s Health Insurance Program (CHIP), TRICARE or the VA Student health coverage Medicare Advantage plan State high-risk pool coverage Plan for non-u.s. citizens, provided by another country Refugee medical assistance provided by Administration for Children and Families Plan for AmeriCorps volunteers To learn more, ask our HR Department. <Contact Info>

77 Did You Know? We will continue to offer a health plan to our employees. However, we do expect health plan costs to rise. This may mean some changes to the health plan offering. In order to manage the expected cost increases, we may make adjustments to the health plan offering. We will supply you with information on any changes, if they occur.

78 Did You Know? We may not offer a health plan to all employees (e.g. those working fewer than 30 hours). You also have the option to purchase insurance through the public health insurance marketplace/exchange, and you may be eligible for federal financial assistance. However, we do expect health plan costs to rise. This may mean some changes to the health plan offering. In order to manage the expected cost increases, we may make adjustments to the health plan offering. We will supply you with information on any changes, if they occur.

79 Did You Know? We will not offer a health plan to our employees in Based on the increase in projected cost in 2014, we will not offer an employer-sponsored health plan. However, you have many options for obtaining healthcare. For example, you may be able to obtain coverage through a: Public health insurance marketplace/ exchange Government program such as Medicare, Medicaid, Children s Health Insurance Program (CHIP), TRICARE or the VA Student health coverage Medicare Advantage plan State high-risk pool coverage Plan for non-u.s. citizens, provided by another country Refugee medical assistance provided by Administration for Children and Families Plan for AmeriCorps volunteers To learn more, ask our HR Department

80 What Do I Need To Think About For My Health Insurance Coverage For 2014? There is a great deal of information regarding the health reform law in the media. You may have heard that there will be more options available to you. As your employer, we care about your health and wellbeing. And, although we cannot make health coverage decisions for you and your family, we want to provide some tools to help educate you about what will be available. Consider your options: 1. Continue or enroll in our employer sponsored plan <INSERT DEADLINE HERE> 2. Consider other coverage options Public health insurance marketplaces/exchanges You can shop for coverage and compare available plan options based on price, benefits, and quality. Each state will have an online marketplace available for benefits coverage in However, you might not qualify for federal financial assistance if you decline coverage under our plan and purchase insurance in a public health insurance exchange <INSERT DEADLINE HERE> o <INSERT HYPERLINK TO PUBLIC MARKETPLACE/EXCHANGE PIECE> Private marketplaces/exchanges A variety of private health insurance exchanges will serve as marketplaces where you can compare health plans and buy coverage. However, no federal financial assistance is available to individuals purchasing coverage through a private health insurance exchange <INSERT DEADLINE HERE> Health insurers and brokers Health insurance companies will sell plans directly to you through their own websites and call centers. In addition, even though you will be able to shop for yourself through the exchanges, you can enlist the assistance of an insurance agent or broker. <INSERT DEADLINE HERE> Retail stores Some health insurance companies are opening retail stores where you can shop for a policy, check on claims and get one-on-one health education coaching. <INSERT DEADLINE HERE> Decline coverage, and pay the individual mandate penalty <INSERT DEADLINE HERE> o <INSERT HYPERLINK TO INDIVIDUAL MANDATE> 3. Be on the lookout for enrollment deadlines for all options! Make the best decision for you and enroll! ANY STREET WEST, TOWNSVILLE, ST 54321

81 Health Reform What You Need to Think About for Health Insurance Coverage in 2014

82 Considerations Great deal of information regarding the health reform law in the media May have heard that there will be more options As your employer, we care about your health and well-being We want to provide some tools to help educate you 2

83 Consider Your Options Continue or enroll in our employer-sponsored plan <INSERT DEADLINE HERE> Consider other coverage options: Public health insurance marketplaces/exchanges Private marketplaces/exchanges Health insurers and brokers Retail stores Decline coverage (pay the individual mandate penalty) Consider other coverage options Be on the lookout for enrollment deadlines for all options! Make the best decision for you and enroll! 3

85 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX You may have heard that because of the health reform law, there will be more health plan options available to you. In short, you can: Continue or enroll in our health plan Consider other coverage options like public health insurance marketplaces/exchanges, health insurers or brokers, private health insurance marketplaces/exchanges, or retail stores Decline coverage We encourage you to be on the lookout for enrollment deadlines for all options. Make the best decision for you, and enroll! To learn more, ask our HR Department. <Contact Info>

86 Did You Know? You may have heard that because of the health reform law, there will be more health plan options available to you. In short, you can: Continue or enroll in our health plan Consider other coverage options like public health insurance marketplaces/ exchanges, health insurers or brokers, private health insurance marketplaces/ exchanges, or retail stores Decline coverage We encourage you to be on the lookout for enrollment deadlines for all options. Make the best decision for you, and enroll! To learn more, ask our HR Department

87 For an Employee That Does Not Have Coverage As you may be aware, the health reform law s individual mandate takes effect January 1, This part of the law requires most individuals to have health insurance. If you do not have health insurance, you will pay a penalty. If you are covered by any of the following plans or programs, then you satisfy the individual mandate: Most employer group health plans, including <Company Name s> plan An individual health insurance policy obtained through a public health insurance marketplace/exchange or elsewhere A government plan such as Medicare, Medicaid, Children s Health Insurance Program (CHIP), TRICARE, or veterans coverage Student health coverage Medicare Advantage plan State high-risk pool coverage Coverage for non-u.s. citizens provided by another country Refugee medical assistance provided by Administration for Children and Families Coverage for AmeriCorps volunteers Come January 1, 2014, You and Your Family Members Must Make a Choice: Enroll in coverage through <Company Name>, if eligible Enroll in other coverage such as an individual or family policy through the health insurance marketplace/exchange (you might qualify for federal financial assistance to do so) Forgo coverage and pay the penalty <Company Name> Coverage As an employer with 50 or more full-time employees, <Company Name> is required by 2015 to offer coverage to all full-time employees working 30 or more hours per week or risk a penalty ANY STREET WEST, TOWNSVILLE, ST 54321

88 OPTIONAL TEXT (depending on situation) In compliance with the law, <Company Name> <intends to continue offering or intends to offer> coverage to all full-time employees working 30 or more hours per week. <Of course <Company Name> retains the right to modify its benefit offerings at any time <subject to bargaining agreements or other contracts>. OR After careful consideration, <Company Name> has decided not to offer health coverage <and we want to make you aware of the many options available to you.> <and we believe that the majority of our employees will fare better by purchasing coverage through a marketplace/exchange. Please find additional information about the marketplaces/exchanges below.> <and we believe that the majority of our employees will fare better by purchasing coverage through a marketplace/exchange. You may be eligible for a subsidy from the government to help you purchase coverage. Please find additional information about the marketplaces/exchanges and subsidies below.> <however, we are increasing your salary by <## percent> to help you purchase health coverage on your own.> When key parts of the health reform law take effect January 1, 2014, you will have a new way to get health insurance. People without health insurance can shop for coverage through an online public health insurance marketplace/exchange and compare available plan options based on price, benefits, and quality. Each state is required by the law to have a marketplace available for benefits coverage in If a state is not prepared to operate a marketplace by that date, the federal government intends to operate the marketplace for the state s residents. Potential Financial Assistance in the Marketplace Financial assistance in the form of advance tax credits may be available to you (to purchase a health plan). If your household income is greater than 100 percent but less than 400 percent of the federal poverty level and you meet other requirements, you might be eligible for a tax credit. Tax credit amounts vary based on household income ANY STREET WEST, TOWNSVILLE, ST 54321

89 If your income is at or below 133 percent of the federal poverty level, you might be eligible for Medicaid. Cost-sharing subsidies may also be available to you (for financial assistance in paying out-of-pocket plan costs like deductibles, co-payments, etc.). For more information about tax credits and subsidies, please visit No Coverage, Pay Penalty If you do not enroll in and maintain health insurance for yourself and your dependents, you may be required to pay an annual penalty (prorated for the number of months you and/or they don t have coverage). In 2014, the penalty is $95 per adult and $47.50 per child (up to $285 for a family) or one percent of family income, whichever is greater. In 2015, the penalty is $325 per adult and $ per child (up to $975 for a family) or two percent of family income, whichever is greater. In 2016, the penalty is $695 per adult and $ per child (up to $2,085 for a family) or 2.5 percent of family income, whichever is greater. Penalties may increase in future years. Exceptions From Penalties You may be exempt from a penalty if any of the following apply: You cannot afford coverage (i.e., would have to pay more than eight percent of annual household income to purchase health insurance after taking into account any employer contributions and subsidies). Your income is below the tax filing threshold. You qualify for a hardship exemption. You experience a gap in coverage of less than three consecutive months in one calendar year. You are a member of religious group that objects to coverage on religious principles. You are a member of nonprofit religious organization that shares medical costs. You are in prison. You are a non-u.s. citizen ANY STREET WEST, TOWNSVILLE, ST 54321

90 You are a Native American tribe member. If you think you qualify for an exemption, please visit for more information. Optional Text Being compliant with health reform and providing you with the most up-to-date information are top priorities for <Company Name>. As we approach January 1, 2014, be on the lookout for more details regarding health reform. If you have questions about the new regulations, please contact Human Resources or visit In the meantime, we've attached a list of frequently asked questions to help explain what we know so far ANY STREET WEST, TOWNSVILLE, ST 54321

91 Health Reform For Employees With No Coverage

92 The Individual Mandate Health reform law s individual mandate takes effect January 1, 2014 Requires most individuals to have health insurance Without health insurance, you will pay a penalty Covered by any of the following plans or programs, you satisfy the individual mandate: Most employer group health plans, including <Company Name> s plan An individual health insurance policy obtained through a public health insurance marketplace/exchange or elsewhere A government plan such as Medicare, Medicaid, Children s Health Insurance Program (CHIP), TRICARE, or veterans coverage Student health coverage Medicare Advantage plan State high-risk pool coverage Coverage for non-u.s. citizens provided by another country Refugee medical assistance provided by Administration for Children and Families Coverage for AmeriCorps volunteers 2

93 Your Choices Come January 1, 2014, you and your family members must make a choice: Enroll in coverage through <Company Name>, if eligible. Enroll in other coverage. Forgo coverage and pay the penalty. 3

94 About Our Company Coverage <Company Name> Coverage <COMPANY NAME> is required by 2015 to offer coverage to all full-time employees working 30 or more hours per week or, risk a penalty. OPTIONAL TEXT (depending on situation) In compliance with the law, <COMPANY NAME> <intends to continue offering or intends to offer> coverage to all full-time employees working 30 or more hours per week. <Of course <COMPANY NAME> retains the right to modify its benefit offering at any time <subject to bargaining agreements or other contracts>. OR After careful consideration, <COMPANY NAME> has decided not to offer health coverage <and we want to make you aware of the many options available to you.> <and we believe that the majority of our employees will fare better by purchasing coverage through a marketplace/exchange. Please find additional information about the marketplaces/exchanges below.> <and we believe that the majority of our employees will fare better by purchasing coverage through a marketplace/exchange. You may be eligible for a subsidy from the government to help you purchase coverage. Please find additional information about the marketplaces/exchanges and subsidies below.> <however, we are increasing your salary by <## percent> to help you purchase health coverage on your own.> 4

95 More About Health Insurance Options The option to purchase health insurance in 2014 is through a public health insurance marketplace/exchange. Compare available policies based on price, benefits, and quality. Each state is required have an online public marketplace available in If a state does not establish one, the federal government will operate an exchange for the state s residents. 5

96 Potential Financial Assistance in the Marketplace Potential financial assistance in the marketplace Financial assistance in the form of advance tax credits may be available to you. If your household income is greater than 100 percent, but less than 400 percent of the federal poverty level and you meet other requirements, you might be eligible for a tax credit. Tax credit amounts vary based on household income. If your income is at or below 133 percent of the federal poverty level, you might be eligible for Medicaid. Cost-sharing subsidies may also be available to you (for financial assistance in paying out-of-pocket plan costs). For more information, please visit 6

97 No Coverage, Pay Penalty No Coverage, Pay Penalty If you do not enroll in and maintain health insurance for yourself and your dependents, you may be required to pay an annual penalty (prorated for the number of months you and/or they don t have coverage). In 2014, the penalty is $95 per adult and $47.50 per child (up to $285 for a family) or one percent of family income, whichever is greater. In 2015, the penalty is $325 per adult and $ per child (up to $975 for a family) or two percent of family income, whichever is greater. In 2016, the penalty is $695 per adult and $ per child (up to $2,085 for a family) or 2.5 percent of family income, whichever is greater. Penalties may increase in future years. 7

98 You May be Exempt From a Penalty if Any of the Following Apply: You cannot afford coverage (would have to pay more than eight percent of annual household income to purchase health insurance after taking into account any employer contributions and subsidies). Your income is below the tax-filing threshold. You qualify for a hardship exemption. You experience a gap in coverage of less than three consecutive months in one calendar year. You are: A member of religious group that objects to coverage on religious principles. A member of nonprofit religious organization that shares medical costs. In prison. A non U.S. citizen. A Native American tribe member. If you think you qualify for an exemption, please visit for more information. 8

99 <Optional Text> Being compliant with health reform and providing you with the most up-to-date information are top priorities for <Company Name>. As we approach January 1, 2014, be on the lookout for more details regarding health reform. Questions? Please contact Human Resources or visit 9

101 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX The health reform law s individual mandate takes effect January 1, This part of the law requires most individuals to have health insurance. If you do not have health insurance, you will pay a penalty. If you are covered by any of a number of plans or programs, then you satisfy the individual mandate. Come January 1, 2014, you and your family members need to make a choice: Enroll in coverage through our company, if eligible Enroll in other coverage Forgo coverage, and pay the penalty To learn more, ask our HR Department. <Contact Info>

102 Did You Know? The health reform law s individual mandate takes effect January 1, This part of the law requires most individuals to have health insurance. If you do not have health insurance, you will pay a penalty. If you are covered by any of a number of plans or programs, then you satisfy the individual mandate. Come January 1, 2014, you and your family members need to make a choice: Enroll in coverage through our company, if eligible Enroll in other coverage such as an individual or family policy through the health insurance marketplace/exchange (you might qualify for federal financial assistance) Forgo coverage, and pay the penalty To learn more, ask our HR Department

103 Notice To Variable Hour Employees of <Sample Company> How the Federal Health Reform Law Affects Your Eligibility for Health Insurance Effective January 1, 2014, the federal health reform law requires you and your dependents to have at least some level of health insurance, called minimum essential coverage. If you do not have this health insurance, you and your dependents may be assessed a modest tax penalty. If you are considered our full-time employee under that law, we are required (beginning in 2015) to offer you and your dependents minimum essential coverage or we risk tax penalties as well. The health reform law considers employees whose hours may vary from payroll period to payroll period to be full-time if they average at least 30 hours per week over a measurement period that we will designate. The measurement period may be up to 12 months in duration. For 2015, here is how we expect to determine whether you are full-time and therefore eligible to receive an offer of health insurance from us, and how we will notify you about that. Note that if you do not yet qualify for an offer of health insurance from us (or even if you do, but our offer asks you to pay more than 9.5 percent of your household income for employee-only coverage, or our insurance offering doesn t meet a minimum value standard set by federal authorities), you may be eligible for federal assistance to purchase health insurance in a new health insurance marketplace/exchange your state will establish. Determining Your Full-Time Status As a general rule, if you average at least 30 hours per week over the relevant measurement period, and are still employed by us at the end of that measurement period, we will offer you and your dependents health insurance. The insurance we offer will be sufficient for you to meet your obligation to have minimum essential coverage. If you accept the offer of coverage, and pay your share for the coverage, you may maintain the coverage through a 12-month <could be shorter, but must be at least as long as the measurement period, as a general rule> eligibility period (also known as a stability period ) that follows the measurement period, unless you terminate employment earlier. We will continue to track your hours during the appropriate measurement periods year after year, as long as you re still our employee, to determine whether you are eligible for coverage during each eligibility period that follows each measurement period ANY STREET WEST, TOWNSVILLE, ST 54321

104 Here are some examples (examples assume 12-month measurement periods): Example 1: Joe is hired by <Sample Company> on June 20, 2014 as a variable hour employee. We begin to track Joe s hours on July 1, 2014, and track them for a new employee measurement period that, in Joe s case, runs until June 30, 2015, which is 12 months after we begin to track his hours. We will then take 30 days <this period could be a bit longer> to determine if Joe averaged at least 30 hours per week over the new employee measurement period and, if he did, to deliver to Joe a health plan enrollment packet. Joe and his eligible dependents may enroll in our health insurance, and if they do, coverage will be effective August 1, 2015 <this could be slightly later>. Joe and his dependents will be eligible for our health insurance through a 12-month new employee eligibility period that, in Joe s case, lasts until July 31, 2016 (unless he stops timely paying for the coverage, we terminate our insurance plan, Joe terminates employment or, in the case of a dependent, the dependent ceases to be eligible for our coverage). If Joe fails to average at least 30 hours over his new employee measurement period, we will not offer health insurance to Joe or his dependents. However, Joe may be eligible to obtain federally subsidized health insurance in his state s health insurance exchange. Example 2: What if Joe joined us on July 1, 2013, and is still with us on January 1, 2015, when the health reform law takes effect? In this case, on January 1, 2015, Joe is considered an ongoing employee, and we will measure Joe s hours over an ongoing employee measurement period that is the same for every ongoing employee. <Note: you may use different measurement periods for employees in a bargaining unit, for employees in a different state, in a different division, or class (salaried vs. hourly).> Our first ongoing employee measurement period runs from December 1, 2013, to November 30, 2014 <this could be different>, and later periods run on this same 12-month window. If Joe averages 30 hours per week in one of these measurement periods, we ll deliver a health insurance packet to Joe. Then he and his eligible dependents may enroll in our health plan. Like in Example 1, Joe and his dependents may continue eligibility through the ensuing ongoing employee eligibility period. These periods run from January 1 to December 31, each year. Of course (just as in Example 1), if Joe stops timely paying for the coverage, we terminate our ANY STREET WEST, TOWNSVILLE, ST 54321

105 insurance plan, Joe terminates employment or, in the case of a dependent, the dependent ceases to be eligible for our coverage during that eligibility period, our coverage will lapse. Example 3: What if Joe is enrolled in the health plan and continues working for us, but during an ensuing ongoing employee measurement period Joe fails to average at least 30 hours per week? In that case, Joe s (and his dependents ) eligibility ends at the conclusion of their current ongoing employee eligibility period. More Information This all might sound a little confusing. Look at it this way: variable hour employees earn eligibility for our health plan by working sufficient hours over 12-month measurement periods. They may gain or lose eligibility following each measurement period, depending on the weekly hours they average during those periods. If they gain eligibility, they remain eligible for up to 12 months, unless they stop paying for the insurance, we terminate the plan, or they terminate employment. For more information about health insurance eligibility in 2015 and beyond, please contact: <insert HR contact information>. Please Note: The rules and regulations under the health reform law are constantly changing. Our benefit offerings, measurement and related periods, and other processes may change. Nothing in this letter should be construed as a contract or other commitment by <Company Name.> ANY STREET WEST, TOWNSVILLE, ST 54321

106 Health Reform Information for Variable Hour Employees

107 What s It All About? Effective January 1, 2014, the federal health reform law requires you to have health insurance. If you don t you may be assessed a modest tax penalty. If you are considered a full-time employee, we are required, beginning in 2015, to offer you and your dependents coverage (or pay a penalty) What s full-time? Employees that average at least 30 hours per week over a measurement period that we will designate. The measurement period may be up to 12 months in duration. Note that if you don t qualify for an offer of health insurance from us (or even if you do, but our offer asks you to pay more than 9.5 percent of your household income for coverage, or our insurance offering doesn t meet a minimum value standard), you may be eligible for federal assistance to purchase health insurance in a new health insurance marketplace/exchange that your state will establish. 2

108 Determining Your Full-Time Status As a general rule, if you average at least 30 hours per week over the relevant measurement period, and are still employed by us at the end of that measurement period, we will offer you and your dependents health insurance. We will continue to track your hours during the appropriate measurement periods year after year to determine whether you are eligible for coverage during each eligibility period that follows each measurement period. 3

109 Here s One Example: Joe is hired by <Sample Company> on June 20, 2014 as a variable-hour employee. We begin to track Joe s hours on July 1, 2014, and track them for a new employee measurement period that, in Joe s case, runs until June 30, 2015, which is 12 months after we began to track his hours. We will then take 30 days <this period could be a bit longer> to determine if Joe averaged at least 30 hours per week over the new employee measurement period and, if he did, to deliver a health plan enrollment packet to Joe. Joe and his eligible dependents may enroll in our health insurance and, if they do, coverage will be effective August 1, 2015 <this could be slightly later>. Joe and his dependents will be eligible for our health insurance through a 12-month new employee eligibility period that, in Joe s case, lasts until July 31, 2016 (unless he stops timely paying for the coverage, we terminate our insurance plan, Joe terminates employment, or in the case of a dependent, the dependent ceases to be eligible for our coverage). If Joe fails to average at least 30 hours over his new employee measurement period, we will not offer health insurance to Joe or his dependents. However, Joe may be eligible to obtain federally subsidized health insurance in his state s health insurance exchange. 4

110 Here s a Second Example: What if Joe joined us on July 1, 2013, and is still with us on January 1, 2015, when the health reform law takes effect? In this case, on January 1, 2015, Joe is considered an ongoing employee, and we will measure Joe s hours over an ongoing employee measurement period that is the same for every ongoing employee. <Note: you may use different measurement periods for employees in a bargaining unit, for employees in a different state, in a different division, or class (salaried vs. hourly).> Our first ongoing employee measurement period runs from December 1, 2013, to November 30, 2014 <this could be different>, and later periods run on this same 12-month window. If Joe averages 30 hours per week in one of these measurement periods, we ll deliver a health insurance packet to Joe and he and his eligible dependents may enroll in our health plan. Like in Example 1, Joe and his dependents may continue eligibility through the ensuing ongoing employee eligibility period. These periods run from January 1 to December 31 each year. Of course (just as in Example 1), if Joe stops timely paying for the coverage, we terminate our insurance plan, Joe terminates employment, or in the case of a dependent, the dependent ceases to be eligible for our coverage during that eligibility period, our coverage will lapse. 5

111 Here s a Third Example: What if Joe is enrolled in the health plan and continues working for us, but during an ensuing ongoing employee measurement period Joe fails to average at least 30 hours per week? In that case, Joe s (and his dependents ) eligibility ends at the conclusion of their current ongoing employee eligibility period. 6

112 For More Information Confused? Look at it this way: variable-hour employees earn eligibility for our health plan by working sufficient hours over 12-month measurement periods. They may gain or lose eligibility following each measurement period, depending on the weekly hours they average during those periods. If they gain eligibility, they remain eligible for up to 12 months, unless they stop paying for the insurance, we terminate the plan, or they terminate employment. For more information, please contact: <insert HR contact information>. Please Note: The rules and regulations under the health reform law are constantly changing. Our benefit offerings, measurement and related periods, and other processes may change. Nothing in this presentation should be construed as a contract or other commitment by <Company Name.> 7

114 PRST-STD U.S. POSTAGE PAID CITY, ST PERMIT NO. XXX If you are a variable hour employee with our company, then you need this information about the health reform law. Variable hour employees earn eligibility for our health plan by working sufficient hours over 12-month measurement periods. You may gain or lose eligibility following each measurement period, depending on the weekly hours you average during those periods. If you gain eligibility, you remain eligible for up to 12 months, unless you stop paying for the insurance, we terminate the plan, or you terminate employment. To learn more, ask our HR Department. <Contact Info>

115 Did You Know? If you are a variable hour employee with our company, then you need this information about the health reform law. Variable hour employees earn eligibility for our health plan by working sufficient hours over 12-month measurement periods. You may gain or lose eligibility following each measurement period, depending on the weekly hours you average during those periods. If you gain eligibility, you remain eligible for up to 12 months, unless you stop paying for the insurance, we terminate the plan, or you terminate employment. To learn more, ask our HR Department

116 Health Reform Glossary for Employees Affordable Care Act (ACA) Also referred to as the Patient Protection and Affordable Care Act (PPACA), is the federal health reform law that requires almost all people in America to have health insurance by 2014, imposes obligations on many employers to offer health insurance, and directs each state to create online marketplaces for the sale of insurance policies. Annual Dollar Limit In the past, some health plans placed a limit on the dollar amount of claims they will pay in a given year for an individual. For essential health benefits, annual dollar limits will be prohibited for plan years beginning in or after The Children's Health Insurance Program (CHIP) Is a program administered by the United States Department of Health and Human Services that provides matching funds to states for health insurance to low income families with children. Coinsurance The amount or percentage of medical expenses, covered by a health plan, that a plan member must pay for health services after the plan s deductible has been met. Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) A Federal law that may allow you to temporarily keep health coverage after you would otherwise lose it (e.g., your employment ends). If you elect COBRA coverage, you pay the full cost of the premiums, including the share the employer used to pay, plus a two percent administrative fee. Consumer-Directed Health Plans (CDHPs) These health plans seek to increase consumer awareness about healthcare costs and provide incentives for consumers to consider costs when making healthcare decisions. These plans usually have a high deductible accompanied by a savings account for healthcare services. There are two types of savings accounts: Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs). Copayment A fixed dollar amount paid by an individual receiving a healthcare service covered by the member's plan. For example, when you go to the doctor s office, you may be required to pay a copayment (e.g., $20) for the visit. Cost-Sharing Health plan members are required to pay a portion of the costs of their care. Examples of these costs include copayments, coinsurance and annual deductibles. Deductible The dollar amount that a plan member must pay each year for healthcare services, covered by the health plan, before the plan begins to pay for the healthcare services. Beginning in or after 2014, deductibles for small group (up to 50 employees) and individual health policies will be limited to $2,000 for individual policies and $4,000 for family policies ANY STREET WEST, TOWNSVILLE, ST 54321

117 Employer Mandate Beginning in 2015, employers meeting size thresholds will be required to offer health insurance to their employees averaging 30 hours or more per week or will face fines for failing to do so. Essential Health Benefits (EHB) A broad set of at least 10 benefit categories including hospitalization, outpatient services, emergency care, prescription drugs, maternity care, preventive services and other benefits. Insurance companies offering individual and small group policies must cover all essential health benefits. All health plans are prohibited from imposing lifetime or annual dollar limits on essential health benefits. Exchange, Health Benefit Exchange, Health Insurance Exchange or Health Insurance Marketplace Online purchasing portals that the health reform law requires each state to establish (public exchange), to facilitate the purchase of individual and small group health insurance coverage. Flexible Spending Account (FSA) An arrangement employers may offer to allow you to pay for many of your out-of-pocket medical expenses with tax-free dollars. Group Health Plan Health insurance offered by a plan sponsor, typically an employer, on behalf of a group of individuals, such as its employees and their dependents. Health Insurance Portability and Accountability Act of 1996 (HIPAA) A law that sets standards for the security and privacy of personal health information, and also generally prohibits discrimination in health plan coverage. Health Maintenance Organization (HMO) A health plan that provides coverage through a network of hospitals, physicians and other healthcare providers. HMOs usually require the selection of a primary care physician who is responsible for managing and coordinating all healthcare. Usually, referrals to specialist physicians are required before the plan will pay for the treatment supplied by the specialist. HMOs typically only pay for care provided by an in-network provider. Health Reimbursement Account (HRA) An account to which is credited dollars that an employee may use to pay for qualified health expenses. HRAs are usually paired with a high-deductible health plan and are funded solely by employer contributions. Health Savings Account (HSA) A tax advantaged savings account that can be used to pay for qualified medical expenses for individuals covered under a qualifying high-deductible health plan. Individuals can establish HSAs through most financial institutions, or through their employer. Both employers and employees may contribute to an HSA, up to specific limits ANY STREET WEST, TOWNSVILLE, ST 54321

118 High-Deductible Health Plan (HDHP) These health insurance plans have higher deductibles and lower premiums than traditional insurance plans. Individual Mandate A requirement under the health reform law that most individuals obtain health insurance or pay a penalty beginning in Initial Measurement Period A three- to 12-month period over which an employer subject to the employer mandate may average the hours worked by new seasonal or variable hour employees, to determine if they are considered full-time under the health reform law. If the employee averages at least 30 hours per week/130 hours per month over this initial measurement period, the employer must make the employee and his or her children an offer of health insurance for an ensuing period called the initial stability period, or risk penalties. Initial Stability Period A period of between six and 12 calendar months during which a seasonal or variable hour employee is or is not offered health insurance (by an employer subject to the employer mandate), depending on whether he or she averaged at least 30 hours per week or 130 hours per month during his or her initial measurement period. Medicaid A federal and state-funded program that provides medical and health-related services to certain low-income Americans. Medicare A federal program that provides healthcare coverage to people age 65 and older, and to those who are under 65 and are permanently disabled or who meet other special criteria such as a diagnosis of end-stage renal disease. Eligible individuals can receive coverage for hospital services (Medicare Part A), physician-based medical services (Medicare Part B) and prescription drugs (Medicare Part D). Out-of-Pocket Costs Healthcare costs for healthcare services that are covered by a health plan, but which are not covered in full by the plan, such as deductibles, copayments, and coinsurance. Once outof-pocket costs reach a certain level for the year, the plan typically pays 100 percent of covered costs incurred thereafter (see Out-of-Pocket Maximum). Out-of-pocket costs do not include premium costs or expenses that are excluded from coverage. Out-of-Pocket Maximum An annual limit on the amount of money individuals are required to pay outof-pocket for covered healthcare costs, excluding premiums. Beginning in or after 2014, health insurance offered by your employer cannot impose cost-sharing for in-network care in amounts greater than the current out-of-pocket limits for high-deductible health plans (as of 2013 $6,250 for an individual policy or $12,500 for a family policy). <NOTE: This requirement applies to non-grandfathered plans only and should be removed for grandfathered plans.> These amounts may be adjusted annually for inflation ANY STREET WEST, TOWNSVILLE, ST 54321

119 Patient Centered Medical Home A healthcare setting where patients receive comprehensive primary care services and have an ongoing relationship with a primary care provider who directs and coordinates their care. Patient Protection and Affordable Care Act (PPACA) Also referred to as the Affordable Care Act (ACA), it is the federal health reform law. Pre-existing Condition A health condition (other than pregnancy) that was diagnosed and/or treated within a specified number of months prior to when the member enrolled in the health plan. The health reform law prohibits the denial of coverage or charging higher premiums due to a pre-existing condition for children under 19, and for all others beginning in Preferred Provider Organization (PPO) A type of healthcare coverage made available through a network of providers. Plan members typically pay higher costs when they seek care from out-of-network providers. Premium The amount paid, often on a monthly basis, by the covered person for health insurance. Premium Subsidies or Premium Tax Credits A fixed amount of money, or a designated percentage of the premium cost, that is provided by the federal government to help people purchase health insurance through a public health insurance exchange/marketplace. The health reform law may provide premium tax credits to people with incomes between 100 and 400 percent of the federal poverty level who purchase health plans through health insurance marketplaces, beginning in However, individuals enrolled in employer-based coverage, or who are offered reasonably robust and affordable employerbased coverage, or who are eligible for Medicare or Medicaid, are not eligible for premium subsidies/tax credits. Preventive Care Services Routine healthcare that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems. The health reform law requires nongrandfathered health plans to provide coverage without member cost-sharing for certain preventive care services. Primary Care Provider A provider, who specializes in, provides, coordinates or helps a patient access a range of health care services. Seasonal Employee An employee who performs labor or services on a seasonal basis ANY STREET WEST, TOWNSVILLE, ST 54321

120 Standard Measurement Period A three-to 12-month period over which an employer subject to the employer mandate may average the hours worked by ongoing (as opposed to new) seasonal or variable hour employees, to determine if they are considered full-time under the health reform law. If the employee averages at least 30 hours per week/130 hours per month over this standard measurement period, the employer must make the employee and his or her children an offer of health insurance for an ensuing period called the standard stability period, or risk penalties. Standard Stability Period A period of between six and 12 calendar months during which a seasonal or variable hour employee is or is not offered health insurance (by an employer subject to the employer mandate), depending on whether he or she averaged at least 30 hours per week or 130 hours per month during his or her standard measurement period. Variable Hour Employee An employee whose hours are expected to vary such that, on his or her start date, it cannot be reasonably determined if he or she will average at least 30 hours per week/130 hours per month over a measurement period. Wellness Plan/Program An employer program to improve health and prevent disease, often with financial incentives and penalties tied to the employee s lifestyle. Please Note: The rules and regulations under the health reform law are constantly changing. Our benefit offerings, measurement and related periods, and other processes may change. Nothing in this memo should be construed as a contract or other commitment by <Company Name.> ANY STREET WEST, TOWNSVILLE, ST 54321

121 Health Reform Glossary for Employees

122 Glossary Affordable Care Act (ACA) Also referred to as the Patient Protection and Affordable Care Act (PPACA), is the federal health reform law that requires almost all people in America to have health insurance by It imposes obligations on many employers to offer health insurance, and directs each state to create an online marketplaces for the sale of insurance policies. Annual Dollar Limit In the past, some health plans placed a limit on the dollar amount of claims they will pay in a given year for an individual. For essential health benefits, annual dollar limits will be prohibited for plan years beginning in or after The Children's Health Insurance Program (CHIP) Is a program administered by the United States Department of Health and Human Services that provides matching funds to states for health insurance to lowincome families with children. Coinsurance The amount or percentage of medical expenses covered by a health plan that a plan member must pay for health services after the plan s deductible has been met. Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) A federal law that may allow you to temporarily keep health coverage after you would otherwise lose it (e.g., your employment ends). If you elect COBRA coverage, you pay the full cost of the premiums, including the share the employer used to pay, plus a two percent administrative fee. Consumer-Directed Health Plans (CDHPs) These health plans seek to increase consumer awareness about healthcare costs and provide incentives for consumers to consider costs when making healthcare decisions. These plans usually have a high deductible accompanied by a savings account for healthcare services. There are two types of savings accounts: Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs). 2

123 Glossary Copayment A fixed dollar amount paid by an individual receiving a healthcare service covered by the member's plan. For example, when you go to the doctor s office, you may be required to pay a copayment (e.g., $20) for the visit. Cost-Sharing Health plan members are required to pay a portion of the costs of their care. Examples of these costs include copayments, coinsurance and annual deductibles. Deductible The dollar amount that a plan member must pay each year for healthcare services, covered by the health plan before the plan begins to pay for the healthcare services. Beginning in or after 2014, deductibles for small group (up to 50 employees) and individual health policies will be limited to $2,000 for individual policies and $4,000 for family policies. Employer Mandate Beginning in 2015, employers meeting size thresholds will be required to offer health insurance to their employees averaging 30 hours or more per week or will face fines for failing to do so. Essential Health Benefits (EHB) A broad set of at least 10 benefit categories including hospitalization, outpatient services, emergency care, prescription drugs, maternity care, preventive services and other benefits. Insurance companies offering individual and small group policies must cover all essential health benefits. All health plans are prohibited from imposing lifetime or annual dollar limits on essential health benefits. Exchange, Health Benefit Exchange, Health Insurance Exchange, or Health Insurance Marketplace Online purchasing portals that the health reform law requires each state to establish (public exchange), to facilitate the purchase of individual and small group health insurance coverage. Flexible Spending Account (FSA) An arrangement employers may offer to allow you to pay for many of your out-of-pocket medical expenses with tax-free dollars. Group Health Plan Health insurance offered by a plan sponsor, typically an employer, on behalf of a group of individuals, such as its employees and their dependents. 3

124 Glossary Health Insurance Portability and Accountability Act of 1996 (HIPAA) A law that sets standards for the security and privacy of personal health information and generally prohibits discrimination in health plan coverage. Health Maintenance Organization (HMO) A health plan that provides coverage through a network of hospitals, physicians, and other healthcare providers. HMOs usually require the selection of a primary care physician who is responsible for managing and coordinating all healthcare. Usually, referrals to specialist physicians are required before the plan will pay for the treatment supplied by the specialist. HMOs typically only pay for care provided by an in-network provider. Health Reimbursement Account (HRA) An account to which is credited dollars that an employee may use to pay for qualified health expenses. HRAs are usually paired with a high-deductible health plan and are funded solely by employer contributions. Health Savings Account (HSA) A tax-advantaged savings account that can be used to pay for qualified medical expenses for individuals covered under a qualifying high-deductible health plan. Individuals can establish HSAs through most financial institutions or through their employer. Both employers and employees may contribute to an HSA up to specific limits. High-Deductible Health Plan (HDHP) These health insurance plans have higher deductibles and lower premiums than traditional insurance plans. Individual Mandate A requirement under the health reform law that most individuals obtain health insurance or pay a penalty beginning in Initial Measurement Period A three- to 12-month period over which an employer subject to the employer mandate may average the hours worked by new seasonal or variable-hour employees to determine if they are considered full-time under the health reform law. If the employee averages at least 30 hours per week/130 hours per month over this initial measurement period, the employer must make the employee and his or her children an offer of health insurance for an ensuing period, called the initial stability period, or risk penalties. 4

125 Glossary Initial Stability Period A period of between six and 12 calendar months during which a seasonal or variablehour employee is or is not offered health insurance (by an employer subject to the employer mandate), depending on whether he or she averaged at least 30 hours per week or 130 hours per month during his or her initial measurement period. Medicaid A federal- and state-funded program that provides medical- and health-related services to certain low-income Americans. Medicare A federal program that provides healthcare coverage to people age 65 and older and to those who are under 65 and are permanently disabled or who meet other special criteria such as a diagnosis of end-stage renal disease. Eligible individuals can receive coverage for hospital services (Medicare Part A), physicianbased medical services (Medicare Part B), and prescription drugs (Medicare Part D). Out-of-Pocket Costs Healthcare costs for healthcare services that are covered by a health plan but which are not covered in full by the plan, such as deductibles, copayments, and coinsurance. Once out-of-pocket costs reach a certain level for the year, the plan typically pays 100 percent of covered costs incurred thereafter (see Out-of-Pocket Maximum). Out-of-pocket costs do not include premium costs or expenses that are excluded from coverage. Out-of-Pocket Maximum An annual limit on the amount of money individuals are required to pay out-ofpocket for covered healthcare costs, excluding premiums. Beginning in 2014 or after, health insurance offered by your employer cannot impose cost-sharing for in-network care in amounts greater than the current out-ofpocket limits for high-deductible health plans (as of 2013, $6,250 for an individual policy or $12,500 for a family policy). <NOTE: This requirement applies to non-grandfathered plans only and should be removed for grandfathered plans.> These amounts may be adjusted annually for inflation. 5

126 Glossary Patient Centered Medical Home A healthcare setting where patients receive comprehensive primary care services and have an ongoing relationship with a primary care provider who directs and coordinates their care. Patient Protection and Affordable Care Act (PPACA) Also referred to as the Affordable Care Act (ACA), it is the federal health reform law. Preexisting Condition A health condition (other than pregnancy) that was diagnosed and/or treated within a specified number of months prior to when the member enrolled in the health plan. The health reform law prohibits the denial of coverage or charging higher premiums due to a preexisting condition for children under 19 and for all others beginning in Preferred Provider Organization (PPO) A type of healthcare coverage made available through a network of providers. Plan members typically pay higher costs when they seek care from out-of-network providers. Premium The amount paid, often on a monthly basis, by the covered person for health insurance. Premium Subsidies or Premium Tax Credits A fixed amount of money, or a designated percentage of the premium cost, that is provided by the federal government to help people purchase health insurance through a public health insurance exchange/marketplace. The health reform law may provide premium tax credits to people with incomes between 100 and 400 percent of the federal poverty level who purchase health plans through health insurance marketplaces, beginning in However, individuals enrolled in employer-based coverage, or who are offered reasonably robust and affordable employer-based coverage, or who are eligible for Medicare or Medicaid, are not eligible for premium subsidies/tax credits. Preventive Care Services Routine healthcare that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems. The health reform law requires non-grandfathered health plans to provide coverage without member cost-sharing for certain preventive care services. Primary Care Provider A provider, who specializes in, provides, coordinates, or helps a patient access a range of health care services. 6

127 Glossary Seasonal Employee An employee who performs labor or services on a seasonal basis. Standard Measurement Period A three- to 12-month period over which an employer subject to the employer mandate may average the hours worked by ongoing (as opposed to new) seasonal or variable hour employees to determine if they are considered full-time under the health reform law. If the employee averages at least 30 hours per week/130 hours per month over this standard measurement period, the employer must make the employee and his or her children an offer of health insurance for an ensuing period called the standard stability period, or risk penalties. Standard Stability Period A period of between six and 12 calendar months during which a seasonal or variable hour employee is or is not offered health insurance (by an employer subject to the employer mandate), depending on whether he or she averaged at least 30 hours per week or 130 hours per month during his or her standard measurement period. Variable Hour Employee An employee whose hours are expected to vary such that, on his or her start date, it cannot be reasonably determined if he or she will average at least 30 hours per week/130 hours per month over a measurement period. Wellness Plan/Program An employer program to improve health and prevent disease, often with financial incentives and penalties tied to the employee s lifestyle. Please Note: The rules and regulations under the health reform law are constantly changing. Our benefit offerings, measurement and related periods, and other processes may change. Nothing in this letter should be construed as a contract or other commitment by <Company Name.> 7

128 Health Reform Frequently Asked Questions This group of frequently asked questions applies to employers with 50 or more full-time equivalent employees. Q: What is the health reform law? A: The health reform law, also known as the Patient Protection and Affordable Care Act (PPACA or ACA) was passed in 2010 with the intent to expand health coverage availability and to ensure minimum standards for health insurance. While many administrative pieces have already happened, the bulk of changes due to health reform will take place in 2014 and Q: What has health reform done already? (For Non-Grandfathered Plans) A: Since 2010, several portions of the law have been put into place, including: Elimination of dollar limits on essential health benefits Required coverage of preventive care with no out-of-pocket cost Extension of health coverage for children to age 26 Elimination of preexisting restrictions on children Limitation on health FSA contributions by an employee to $2,500 per year Tax penalty increased from 10 to 20 percent for non-healthcare use of health savings account (For Grandfathered Plans) A: Since 2010, several portions of the law have been put into place, including: Elimination of annual and lifetime dollar limits for essential health benefits Extension of health coverage for children to age 26 <insert if this applies to your company (subject to a narrow exception until 2014 for children with access to their own employment-based coverage)> Elimination of preexisting restrictions on children Limitation on health FSA contributions by an employee to $2,500 per year Tax penalty increased from 10 to 20 percent for non-healthcare use of health savings account ANY STREET WEST, TOWNSVILLE, ST 54321

129 Q: Are health plan overall costs increasing? A: With the requirements of health reform, we expect the cost of the health plan to increase. Included in the health reform law are fees, taxes, and mandates that have direct or indirect impacts on our overall plan costs. Q: Are health plan contributions increasing? A: While the overall cost of coverage is increasing, your contributions will <insert employee contribution>. Q: What is the individual mandate that I keep hearing about? A: This part of the law requires everyone to have health insurance. If you do not have health insurance, you might owe a penalty. <link to individual mandate document> Q: Is my employer required to offer me insurance? A: In 2015, larger employers are required to offer insurance to employees working 30 or more hours per week on average. Employers who don t offer qualifying and affordable coverage to employees working 30 hours or more on average per week are subject to potential penalties. Q: What is considered affordable health insurance? A: In 2015 a plan will be considered affordable if the employee contribution for employee-only coverage is no more than 9.5 percent of the employee s household income. There is not an affordability requirement for dependent child or spouse coverage. Q: Is my employer required to offer coverage to my dependents and spouse/domestic partner? A: In 2015, if your employer offers insurance to you, it must also make it available to your children to age 26. However, it is not required to offer coverage to your spouse or domestic partner ANY STREET WEST, TOWNSVILLE, ST 54321

130 Q: My employer is not offering me coverage. What are my options? A: When they become available, you may consider shopping for health insurance on your state s public health insurance marketplace/exchange. These central clearinghouses, or virtual marketplaces, will offer plans to individuals. Individuals whose income is between 100 percent and 400 percent of the federal poverty level might be eligible for federal financial assistance in the form of a tax credit when they obtain coverage through a marketplace. (The eligible range for a family of four in 2013 was set at $23,550 to $94,200 in the 48 contiguous states and the District of Columbia.) However, no financial assistance is offered where an individual is enrolled in employer-based coverage or has an offer of reasonably robust and affordable coverage through an employer. Q: Can I just stay with my current health plan? A: Yes, as long as your employer continues to offer it and you remain eligible. Q: I heard Medicaid has been expanded. How do I know if I qualify? A: This answer varies by the state in which you reside. Please check with your local Medicaid office for additional information or visit Q: Why does the number of hours I work impact my eligibility? A: Hours are being tracked to determine if you are eligible for our company health coverage. Effective in 2015, the health reform law requires that employers offer coverage to full-time employees working 30 or more hours, on average, per week, or the employer risks a penalty. If you have questions about your eligibility, please contact your <INSERT CONTACT HERE>. Please Note: The rules and regulations under the health reform law are constantly changing. Our benefit offerings, measurement and related periods, and other processes may change. Nothing in this letter should be construed as a contract or other commitment by <Company Name.> ANY STREET WEST, TOWNSVILLE, ST 54321

131 Health Reform Frequently Asked Questions

132 Please customize (add/remove questions) for your company s situation.

133 Frequently Asked Questions Q: What is the health reform law? A: The health reform law, also known as the Patient Protection and Affordable Care Act (PPACA or ACA) was passed in 2010 with the intent to expand health coverage availability and to ensure minimum standards for health insurance. While many administrative pieces have already happened, the bulk of changes due to health reform will take place in 2014 and Q: What has health reform done already? <For Non-Grandfathered Plans> A: Since 2010, several portions of the law have been put into place, including: Elimination of dollar limits on essential health benefits Required coverage of preventive care with no out-of-pocket cost Extension of health coverage for children to age 26 Elimination of preexisting restrictions on children Limitation on health FSA contributions by an employee to $2,500 per year Tax penalty increased from 10 to 20 percent for non-healthcare use of health savings account <For Grandfathered Plans> A: Since 2010, several portions of the law have been put into place, including: Elimination of annual and lifetime dollar limits for essential health benefits Extension of health coverage for children to age 26 <insert if this applies to your company (subject to a narrow exception until 2014 for children with access to their own employment-based coverage)> Elimination of preexisting restrictions on children Limitation on health FSA contributions by an employee to $2,500 per year Tax penalty increased from 10 to 20 percent for non-healthcare use of health savings account 3

134 Frequently Asked Questions Q: Are overall health plan costs increasing? A: With the requirements of health reform, we expect the cost of the health plan to increase. Included in the health reform law are fees, taxes, and mandates that have direct or indirect impacts on our overall plan costs. Q: Are health plan contributions increasing? A: While the overall cost of coverage is increasing, your contributions will <insert employee contribution>. Q: What is the individual mandate that I keep hearing about? A: This part of the law requires everyone to have health insurance. If you do not have health insurance, you might owe a penalty. 4

135 Frequently Asked Questions Q: Is my employer required to offer me insurance? A: In 2015 larger employers are required to offer insurance to full-time employees working 30 or more hours per week on average. Employers who don t offer qualifying and affordable coverage to employees working 30 hours or more on average per week are subject to potential penalties. Q: What is considered affordable health insurance? A: In 2015 a plan will be considered affordable if the employee contribution for employee-only coverage is no more than 9.5 percent of the employee s household income. There is not an affordability requirement for dependent child or spouse coverage. Q: Is my employer required to offer coverage to my dependents and spouse/domestic partner? A: In 2015 if your employer offers insurance to you, it must also make it available to your children to age 26. However, it is not required to offer coverage to your spouse or domestic partner. 5

136 Frequently Asked Questions Q: My employer is not offering me coverage. What are my options? A: When they become available, you may consider shopping for health insurance on your state s public health insurance marketplace/exchange. These central clearinghouses, or virtual marketplaces, will offer plans to individuals. Individuals whose income is between 100 percent and 400 percent of the federal poverty level might be eligible for federal financial assistance in the form of a tax credit, when they obtain coverage through a marketplace. (The eligible range for a family of four in 2013 was set at $23,550 to $94,200 in the 48 contiguous states and the District of Columbia.) However, no financial assistance is offered where an individual is enrolled in employer-based coverage or has an offer of reasonably robust and affordable coverage through an employer. Q: Can I just stay with my current health plan? A: Yes, as long as your employer continues to offer it and you remain eligible. Q: I heard Medicaid has been expanded. How do I know if I qualify? A: This answer varies by the state in which you reside. Please check with your local Medicaid office for additional information or visit 6

137 Frequently Asked Questions Q: Why does the number of hours I work impact my eligibility? A: Hours are being tracked to determine if you are eligible for company health coverage. Effective in 2015, the health reform law requires that employers offer coverage to full-time employees working 30 or more hours, on average, per week, or the employer risks a penalty. If you have questions about your eligibility, please contact your <INSERT CONTACT HERE>. Please Note: The rules and regulations under the health reform law are constantly changing. Our benefit offerings, measurement and related periods, and other processes may change. Nothing in this presentation should be construed as a contract or other commitment by <Company Name.> 7

138 Health Reform Timeline for Employees and Beyond Adult child coverage until age 26 Annual dollar limits restricted Emergency room coverage as innetwork, no prior authorization (nongrandfathered plans) Lifetime dollar limits prohibited No pre-existing conditions for kids until age 19 Pediatricians as primary care physicians, direct access to OB/GYNs (nongrandfathered plans) Medicare Part D doughnut hole gap Preventive services covered at 100 percent (nongrandfathered plans) Rescissions prohibited except for fraud or nonpayment Discounts in Medicare Part D doughnut hole Health Savings Accounts/ Health Reimbursement Accounts/ Flexible Spending Accounts (FSA): limitations for over the counter medications Increase penalty for nonqualified HSA withdrawals Minimum medical loss ratio (MLR): 85 percent for large group; 80 percent for small group and individual (fully insured plans only) New women s preventive services paid at 100% (nongrandfathered plans) Summary of benefits and coverage (SBC) and the Uniform Glossary made available Employee notification of access to public health insurance marketplaces/ exchanges FSA contributions limited to $2,500 High earner tax begins (applies to individuals) W-2 reporting of the value of employer sponsored health benefits (for prior year) Coverage for all adult children until age 26 including those that have employer coverage (formerly not covered for grandfathered plans) Essential health benefits required for small group* insurance Public health marketplaces/ exchanges open Individual mandate takes effect Mandatory coverage for routine expenses in clinical trials (nongrandfathered plans) No annual dollar limits No pre-existing condition exclusions Out-of-pocket limits for HSA qualified plans (non-grandfathered plans) Tax credits and subsidies for individuals available for qualified individuals in the public health insurance marketplaces/ exchanges Waiting period limits Allowable premium differentials for wellness programs increase Employer mandate takes effect (2015) High-value plan excise tax (aka Cadillac tax) begins (2018) Medicare Part D doughnut hole closed by 2020 States can open public health insurance marketplaces/ exchanges to CHIP eligibles (2015) and all employers (2017) *Currently 50 employees or fewer; will increase to 100 employees in Please Note: Some of these changes take effect on the first day of the plan year beginning in the year noted at the top of the column ANY STREET WEST, TOWNSVILLE, ST 54321

139 Health Reform Timeline for Employees

140 2010 Adult child coverage until age 26 Annual dollar limits restricted Emergency room coverage as in-network, no prior authorization (non-grandfathered plans) Lifetime dollar limits prohibited No pre-existing conditions for kids until age 19 Pediatricians as primary care physicians, direct access to OB/GYNs (non-grandfathered plans) Medicare Part D doughnut hole gap Preventive services covered at 100 percent (non-grandfathered plans) Rescissions prohibited except for fraud or nonpayment 2

141 2011 Discounts in Medicare Part D doughnut hole Health Savings Accounts (HSAs)/Health Reimbursement Accounts/Flexible Savings Accounts (FSAs): limitations for overthe-counter medications Increase penalty for non-qualified HSA withdrawals Minimum medical loss ratio (MLR): 85 percent for large group; 80 percent for small group and individual (fully insured plans only) 3

142 2012 New women s preventive services paid at 100 percent (nongrandfathered plans) Summary of benefits and coverage (SBC) and the Uniform Glossary made available 4

143 2013 Employee notification of access to public Health Insurance Marketplaces/Exchanges FSA contributions limited to $2,500 High earner tax begins (applies to individuals) W-2 reporting of the value of employer sponsored health benefits (for prior year) Please Note: Some of these changes take effect on the first day of the plan year beginning in the year noted. 5

144 2014 Coverage for all adult children until age 26 including those that have employer coverage (formerly not covered for grandfathered plans) Essential health benefits required for small group* insurance Public health marketplaces/exchanges open Individual mandate takes effect Mandatory coverage for clinical trials (non-grandfathered plans) No annual dollar limits No pre-existing condition exclusions Out of pocket limits for HSA qualified plans (non-grandfathered plans) Tax credits and subsidies for individuals available for qualified individuals in the public health insurance marketplaces/exchanges Waiting period limits Allowable premium differentials for wellness programs increase *Currently 50 employees or fewer; will increase to 100 employees in 2016 Please Note: Some of these changes take effect on the first day of the plan year beginning in the year noted. 6

145 2015 and Beyond Employer mandate takes effect (2015) High-value plan excise tax (aka Cadillac tax) begins (2018) Medicare Part D doughnut hole closed by 2020 States can open public health insurance marketplaces/exchanges to CHIP eligibles (2015) and all employers (2017) Please Note: Some of these changes take effect on the first day of the plan year beginning in the year noted. 7

146 Letter From HR or CEO to Senior Management Dear <MANAGER NAME>, I want to give you a brief update on what is happening with health reform. Since <insert shortly after for new clients>the law passed in 2010, we have been working with Lockton Companies (our benefits advisor) to ensure our health plans are in compliance with the law. For example, over the past two years we have <choose relevant options> eliminated annual and lifetime limits for essential health benefits, added preventive care coverage at 100 percent for many preventive care services, added health coverage for certain children through age 26, eliminated preexisting condition restrictions on children, and limited the maximum health flexible spending account (FSA) contribution to $2,500 per year. We expect to continue offering health insurance to all employees working 30 or more hours per week. Our employees will also have other options through which to purchase insurance, including the public health insurance marketplace/exchange for the state in which they reside (but federal financial assistance to buy insurance may not be available for some or all of our employees). Here is a summary of the most significant new requirements that will be effective <date>: As a company with more than 50 full-time equivalent employees ( full-time means they average 30 or more hours per week), we will be required in 2015 and beyond to offer qualifying and affordable health benefits to those employees and their children to age 26 or face a penalty. <insert Company policy on lookback period>. <Company Name s> s plan is qualifying and affordable for <some -- most -- all> employees, which means it satisfies health reform-imposed requirements regarding the robustness of the coverage and how much we may charge employees for employee-only coverage. <With Lockton we have modeled many scenarios for our company and the results are > We expect the cost of our health plan to increase. Included in the health reform law are fees, taxes, and mandates that have direct or indirect impacts on our overall plan costs. Most individuals will pay a penalty if they do not have health insurance for 2014 and later years, which means our plan may attract more enrollees. The rules and regulations under the health reform law are constantly changing. Our health benefits offerings, measurement and related periods, and other processes may have to change. As we approach the next benefits enrollment period, we will supply our employees with additional details regarding health reform. Sincerely, <HR VP NAME> ANY STREET WEST, TOWNSVILLE, ST 54321

147 Letter From HR VP to CEO <CEO NAME>, I want to give you a brief update on what is happening with health reform. Since the <insert shortly after for new clients> law passed in 2010, we have been working with Lockton Companies to ensure our benefit plans are in compliance with the law. For example, over the past two years we have <choose relevant options> eliminated annual and lifetime limits for essential health benefits, added preventive care coverage at 100 percent for many preventive care services, added health coverage for certain children through age 26, eliminated preexisting condition restrictions on children, and limited the maximum health flexible spending account (FSA) contribution to $2,500 per year. The greatest challenges impacting <CompanyName> will go into effect on <MONTH DAY, 2014>. Here is a summary of the most significant new requirements: As a company with more than 50 full-time equivalent employees ( full-time means they average 30 or more hours per week), we will be required in 2015 and beyond to offer qualifying and affordable health benefits to those employees and their children to age 26 or face a penalty. <insert Company policy on lookback period>. <Company Name> s plan is qualifying and affordable for <some -- most -- all> employees, which means it satisfies health reform-imposed requirements regarding the robustness of the coverage and how much we may charge employees for employee-only coverage. <With Lockton we have modeled many scenarios for our company and the results are > We expect the cost of our health plan to increase. Included in the health reform law are fees, taxes, and mandates that have direct or indirect impacts on our overall plan costs. Most individuals will pay a penalty if they do not have health insurance for 2014 and later years, which means our plan may attract more enrollees. Lockton is keeping us apprised of additional regulatory guidance. The rules and regulations under the health reform law are constantly changing. Our health benefits offerings, measurement and related periods, and other processes may have to change. We continue to explore strategies to mitigate the impact on our company and employees. I will keep you updated. In the interim, if you would like to hear more from the health reform experts at Lockton, I would be happy to schedule a meeting. Sincerely, <HR VP NAME> ANY STREET WEST, TOWNSVILLE, ST 54321