The Affordable Care Act: Health Coverage Options & Considerations in 2014

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1 The Affordable Care Act: Health Coverage Options & Considerations in 2014 J A C K S O N V I L L E A R E A C H A M B E R O F C O M M E R C E A U G U S T 2 7, L A U R A M I N Z E R E X E C U T I V E D I R E C T O R, H E A L T H C A R E C O U N C I L I L L I N O I S C H A M B E R O F C O M M E R C E

2 What happens in 2014? Insurers prohibited from denying coverage due to a pre-existing condition AND Individuals must obtain health insurance 1. Their employer 2. The private market 3. The public Health Insurance Marketplace, or 4. Medicaid/Medicare Employers (50 and over) VOLUNTARILY offer affordable coverage to all full-time employees; penalty not assessed until 2015 Health insurance coverage purchased on the Exchange/Health Insurance Marketplace takes effect Medicaid expansion takes effect

3 What else happens in 2014? Health insurance companies can only rate you on: Age Where you live Tobacco-use Family size Health insurance coverage will grow more comprehensive; outof-pocket costs limited Health insurance coverage premiums/out-of-pocket costs could be subsidized on the new Health Insurance Marketplace

4 The Individual Mandate Beginning in 2014, all individuals (with some qualified exemptions) are required to obtain health insurance coverage. Penalty Levels (Penalties are paid per adult in household with 50% penalty applied per child in the household, with cap of $2,250 per family) 2014 Greater of $95 or 1% of taxable income 2015 Greater of $325 or 2% of taxable income 2016 Greater of $695 or 2.5% of taxable income

5 The Employer Mandate BEGINNING in 2015 each employer with 50 full-time equivalent (FTE) employees must offer coverage minimum essential coverage to its full-time employees (and dependents). Failure to do so could result in a penalty.* *Ways the Penalty Applies 1. Employer does not offer coverage & at least one full-time employee receives premium assistance on the exchange 2. Employer does offer coverage, but coverage is unaffordable & at least one full-time employee receives premium assistance on the exchange

6 What happens if I don t sign up for health insurance in 2014? No penalty will be assessed until federal/state income taxes are filed in 2015 Tax filing forms will likely require basic information on your health coverage; employers and insurance companies are required to verify individual tax filing If owed a tax refund in 2015, penalty can ONLY be withheld from refund IRS CANNOT garnish wages or take any other adverse actions they are authorized to take for failing to pay income taxes No health insurance coverage could mean other financial problems if medical issues require medical treatment without insurance

7 Health Insurance Options in 2014 Individuals/Families THE NEW HEALTH INSURANCE MARKETPLACE AND MEDICAID

8 The Illinois Coverage Landscape in 2014 INDIVIDUAL Private Market Medicaid Total est. 540,000 enroll Uninsured Est. 1.8 million GROUP INDIVIDUAL AGENTS/BROKERS Marketplace Total est. 1.4 million enroll High Risk Health Insurance Pool HIPAA CHIP High Risk Health Insurance Pools Traditional CHIP, & IPXP GROUP Navigators/ In-person Assistance

9 What happens if my employer does not offer health insurance? Health insurance options may be available on the new Health Insurance Marketplace at subsidized rates (based on household income) Medicaid coverage available (based on household income) Private individual/family plans offered at unsubsidized rates Medicare coverage available (age 65 and older) Spouse s or parent s employer offer health insurance?

10 What happens if my employer provides health insurance? If eligible, enroll in employer s health insurance plan (tax free) If you are not-eligible for health insurance or employer s health insurance fails to meet certain standards, health insurance options on the new Health Insurance Marketplace may be available at subsidized rates (based on household income) Medicaid coverage available (based on household income) Private individual/family plans offered at unsubsidized rates (may not have same tax-free benefits) Medicare coverage available (age 65 and older)

11 The Health Insurance Marketplace What is it? The marketplace is an online portal that provides individuals, families, and small employers a more centralized option to shop and compare health insurance plans that may be eligible for a subsidy to help cover premiums and out-of-pockets costs.

12 Coverage Options for Individuals/Families in 2014 INDIVIDUAL Private Market Medicaid GROUP Health Insurance Marketplace

13 Premium Assistance & Cost-Sharing Subsidy Premium assistance available to individuals/families between 100% (or 139% in IL) and 400% FPL that do not have access to affordable employer-sponsored coverage to lower premium costs for plans on the exchange. Cost-sharing subsidy available to individuals/families between 100% (or 139% in IL) and 400% FPL that do not have access to affordable employer-sponsored coverage to limit the selected plan s out-of-pocket costs.

14 Premium Assistance Household Income Annual Dollar Amount (2013) Premium Limit (as a % of Household Income Expected Monthly Premium Contribution % FPL $ $15,282 2% $19-$ % FPL $15,282-$17, % $38-$ % FPL $17,235-$22, % $57-$ % FPL $22,980-$28, % $121-$ % FPL $28,725-$34, % $193-$ % FPL $34,470-$40, % $272-$ % FPL $40,215-$45, % $318-$364

15 Cost-Sharing Subsidy Household Income Reduction in Out-of-Pocket Liability % FPL 2/3rds of max % FPL ½ of max % FPL 1/3 rd of max *Individuals and families whose household income is between % FPL automatically qualify for a cost-sharing subsidy ONLY if they select a silver plan (70%) on the Exchange.

16 The Marketplace Individual Market Health Insurance Marketplace Target Audience: Individuals/families eligible for premium assistance (based on household income & lack of access to minimum essential coverage through their employer. Individuals that do not qualify for Medicaid.

17 * Source: MA Commonwealth Connector (Exchange)

18 Coverage Benefit Package Options Bronze Silver Gold Platinum 60% of healthcare costs covered 70% of healthcare costs covered 80% of healthcare costs covered 90% of healthcare costs covered

19 Coverage Benefit Package Options - Bronze Bronze 60% of healthcare costs covered Lowest Premium Ideal for those seeking more affordable plan and do not require a lot of healthcare services More out-of-pocket costs imposed; annual out-ofpocket is limited to $6,350 for individual/$12,700 for a family Not eligible for a costsharing subsidy

20 Coverage Benefit Package Options - Silver Silver 70% of healthcare costs covered 2 nd lowest premium Ideal for those seeking more affordable plan and do not require a lot of healthcare services More out-of-pocket costs imposed; annual out-ofpocket is limited to $6,350 for individual/$12,700 for a family Only plan eligible for cost-sharing subsidy

21 Coverage Benefit Package Options - Gold Gold 80% of healthcare costs covered 2 nd highest premium Ideal for those requiring more coverage, but not at the highest premium price Out-of-pocket costs less than Bronze & Silver; annual out-of-pocket is limited to $6,350 for individual/$12,700 for a family Not eligible for a costsharing subsidy

22 Coverage Benefit Package Options - Platinum Platinum 90% of healthcare costs covered Most expensive plan Ideal for those who have a lot medical needs and therefore, require more coverage Out-of-pocket costs lowest of all plans; annual out-ofpocket is limited to $6,350 for individual/$12,700 for a family Not eligible for a costsharing subsidy

23 Coverage Benefits Essential Health Benefits All Bronze, Silver, Gold, and Platinum Plans must cover the following services and benefits in the following categories: Ambulatory patient services Emergency services Hospitalization Laboratory services Maternity and newborn care Mental health and substance use disorder services, including behavioral health services Pediatric services, including oral and vision care Prescription drugs Preventive and wellness services and chronic disease management Rehabilitative and habilitative services and devices

24 Coverage Benefit Package Option - Catastrophic Bare bones coverage option available to only those age 30 years or younger and those who qualify for a hardship exemption No essential health benefits covered; only 3 primary care visits Any other medical costs claimed must be paid by enrollee up to $6,350 single/$12,700 family Not eligible for a costsharing subsidy

25 Medicaid Eligibility Health Insurance Marketplace will determine Medicaid eligibility in 2014 and beyond Medicaid eligibility = no eligibility for subsidized health insurance through the Marketplace Eligibility expands to childless, single adults at or below 138% FPL ($15,856 in 2013) Medicaid benefits enhanced by own essential health benefits

26 Health Insurance Options in 2014 Employers THE NEW HEALTH INSURANCE MARKETPLACE

27 ACA Treatment of Employer Size in 2014 Employers (less than 50 employees) Employers (50 employees or more) Exempt from employer coverage responsibilities and penalties Eligible to purchase coverage on the Exchange beginning 2014 Small employers (25 employees or less) eligible for tax credit to purchase coverage on the Exchange Required to provide affordable coverage or be subject to penalties, but not until 2015 Employers with 100 employees or less eligible to purchase coverage on the Exchange beginning 2016; state option to open Exchange to larger employers in 2017

28 Employer Plan Selection on the Marketplace Less than 50 FTEs Individual Market Health Insurance Marketplace SHOP No Coverage Offered: Employees will be free to shop/buy coverage on the individual marketplace without subjecting you, the employer, to a penalty in Small Group Plan Option: Purchase small group plan on SHOP (25 employees or less may get tax credit for SHOP plan); In 2015, select metal tier and allow employees to select specific plan within that tier.

29 Small Employer Tax Credit in 2014 Small Employers 25 employees or less Avg. annual wages cannot exceed $50,000 Employer premium contribution = 50% or more Tax credit available in tax years Up to 50% of employer contributions Up to 35% of employer contributions for tax-exempt employers

30 Small Group Coverage Benefit Package Options Bronze Silver Gold Platinum 60% of healthcare costs covered 70% of healthcare costs covered 80% of healthcare costs covered 90% of healthcare costs covered

31 Group Coverage Benefits Essential Health Benefits All Bronze, Silver, Gold, and Platinum Plans must cover the following services and benefits in the following categories: Ambulatory patient services Emergency services Hospitalization Laboratory services Maternity and newborn care Mental health and substance use disorder services, including behavioral health services Pediatric services, including oral and vision care Prescription drugs Preventive and wellness services and chronic disease management Rehabilitative and habilitative services and devices

32 Employer Plan Selection Options in 2014 Group and individual plans still exist on the private/non-health Insurance Marketplace Private Market Group/individual plans not eligible for small employer tax credit or premium assistance Group/individual plans will be offered as Bronze, Silver, Gold, and Platinum plans with essential health benefits included

33 Health Insurance Options in 2014 CAN I AFFORD ANY OF THEM?

34 If you are young and healthy... Under 26, do parents have health insurance through their employer? Eligible to enroll in employer s health benefits? Single or have dependents Medicaid eligible? Shopping for coverage on the Marketplace or the private market? Young and healthy is no longer an advantage Comprehensive health benefits positive and negative Catastrophic coverage option or subsidy eligibility on Marketplace? To enroll or not?

35 If you have medical problems/pre-existing condition... No more denial or rate up because of health status/pre-existing condition Shopping for coverage on the Marketplace or the private market? Health status no longer a disadvantage Comprehensive health benefits positive and negative Eligibility for subsidy Eligible to enroll in employer s health benefits? Eligible for Medicaid/Medicare?

36 If you currently have an individual/family health policy... Cost of plan in 2014 will depend upon: Age and health status More comprehensive/ richer benefits Where you live Family size Whether you qualify for a subsidy on the new Marketplace or not

37 If you currently have/offer group-sponsored health coverage... Cost of plan in 2014 will depend upon: Age and health status of group More comprehensive/ richer benefits Where the business is located Size of group Small employer tax credit eligibility Plan renewal date Fully-insured or self-insured plan

38 The ACA in 2014 KEY TAKEAWAYS & CONSIDERATIONS FOR EMPLOYERS AND THEIR EMPLOYEES/FAMILIES

39 ACA Impact: Self-Employed/Individuals & Families Individual Mandate applies No health insurance denial based on pre-existing condition Health coverage more comprehensive (essential health benefits) Price point of coverage factors: New health insurance underwriting changes Comprehensiveness of coverage Premium assistance eligibility

40 ACA Impact: Small Employers Less than 50 FTES No health coverage offered = no penalty EXCEPT the individual mandate still applies Employee Exchange Notification required Health benefits group or non-group more comprehensive (essential health benefits) Price point of coverage factors: New health insurance underwriting changes Comprehensiveness of coverage Small employer tax credit eligibility

41 ACA Impact: Large Employers 50 FTEs or More Employer Mandate Applies Employee Exchange Notification required Health benefits group or non-group more comprehensive (essential health benefits) Self-insured groups exempt from EHB Price point of coverage factors: New health insurance underwriting changes Comprehensiveness of coverage

42 Considerations for All Employers Employers (less than 50 employees) Employers (50 or more) No Coverage Offered Employers (50 or more) Fully Insured Employers (50 or more) Self- Insured Purchase small group coverage on the Exchange? If Exchange, select plans for employees or allow employees to choose? If no coverage offered employees pay individual penalty or purchase individual policies on Exchange or private market Assess employee demographics eligibility for premium tax credits? Pay the penalty or begin offering coverage (purchased on private small group market) to avoid penalty?* * Employers with less than 100 employees can begin purchasing coverage on the Exchange beginning in Assess cost-sharing and benefits to determine affordability Assess employee demographics eligibility for premium tax credits? Weigh the options - keep coverage or drop coverage, pay penalty, and send employees to shop on the Exchange? Are there other benefit options? Assess cost-sharing and benefits to determine affordability Assess employee demographics eligibility for premium tax credits? Weigh the options - keep coverage or drop coverage, pay penalty, and send employees to shop on the Exchange?

43 Other Key Considerations for Employers Plan renewal date Minimum essential coverage offer and employee/family eligibility for lower-cost coverage New out-of-pocket limits Enhanced wellness incentives Minimum value = opportunity to lower costs?

44 Key Takeaways Delay = opportunity to plan for workforce dynamics in 2014/2015 Delay = opportunity to re-assess benefit strategy in 2014/2015 Eligibility for the small employer tax credit? Develop communication strategy! Consult with benefit, tax and legal specialists!

45 Helpful Websites IRS resources on ACA provisions: Home US Department of Labor Employee Benefits Security Administration (EBSA): Healthcare.gov implementation resources and new Marketplace Access: Center for Consumer Information and Insurance Oversight (CCIIO): cciio.cms.gov/ Illinois Health Reform Implementation Council: www2.illinois.gov/gov/healthcarereform Kaiser Family Foundation Health Reform Source: healthreform.kff.org/

46 Questions? CONTACT INFORMATION: (217) , EXT. 240