1 Patient Protection and Affordable Care Act (ACA) ACA Guide for Group Employers Agent and Broker Information
2 DISCLAIMER 2 This information is being provided in an effort to alert you to changes required by the Patient Protection and Affordable Care Act (PPACA) otherwise known as Health Care Reform (HCR) Please note that this information is subject to change The following is for informational purposes only and must not be considered legal or tax advice Please seek advice from your own legal or tax advisor to receive specific information that relates to your situation
3 HISTORY The Affordable Care Act (ACA) signed into law March 23, 2010 Largest piece of U.S. health care legislation since Medicare in The primary goal of the ACA is to decrease the number of uninsured Americans and reduce the overall costs of health care. It establishes a health care Marketplace (Exchange) to help individuals shop for health coverage and determine eligibility for help paying premiums. Provides Individuals with Premium tax credits and cost sharing reductions to help eligible low and middle income families afford health coverage. Provides certain Small Employers health care Tax Credits. Small Employers may shop for and obtain coverage through what is called the SHOP Exchange. Expand Medicaid through State Partnerships. 3
4 DEFINITIONS PPACA ACA,HCR, PPACA APTC AV CSR Exchange, HIX, HIM, Marketplace EHBs Patient Protection Affordable Care Act Affordable Care ACT Advanced Premium Tax Credit Actuarial Value-The value of benefits in relation to the amounts that members must pay (cost sharing) Cost Sharing Reduction A web based portal for presentation of and purchase of Health Care Products (Exchange) Essential Health Benefits-A set of benefits defined by statute and are required to be offered in all products offered through the exchange 4
5 DEFINITIONS PPACA MEC Metal Plans MOOP QHPs SHOP Patient Protection Affordable Care Act Minimum Essential Coverage-The minimum amount of benefit that must be offered by an employer without incurring a penalty Platinum, Gold, Silver, Bronze-Plans must meet certain AVs to qualify as QHPs Maximum Out of Pocket Qualified Health Plans-Benefits approved for use on and off the Exchange Small Employer Health Option Program 5
6 WHY DO WE NEED HEALTH CARE REFORM? As many as 25% of Americans currently have no health Coverage- 67% of uninsured individuals live in 13 states- Florida is estimated to have over 4 million uninsured- 55% Male-45% Female % of Federal Poverty Level of Uninsured- Age- Under 138% 139 % -400% Above 400% FPL. 51% 38% 10% under age 18, 19-25, 26-34, 35-54, % 17% 21% 34% 12% Free lunch is available to children whose family income is less than $29,265 a year. ( 100% FPL for a family of 4) Almost 60 % of the children in Flagler and Volusia County receive free or reduced lunch. Source: Daytona Beach News Journal, Feb. 5,
7 INDIVIDUAL MANDATE, PENALTIES 7 ACA imposes tax penalties on individuals and dependents who do not maintain minimum essential coverage beginning January 1, 2014 Tax Amount THE GREATER OF : Flat dollar amount (total capped at 300% of the per person adult amount) $95 $325 $695 OR 2% 2.5% % of taxable household income 1% Tax applies to individuals and dependents but is 50% of adult amount for any dependents under 18 Dependent tax assessed against taxpayer claiming dependent
8 WHAT IS THE HEALTH INSURANCE MARKETPLACE? (EXCHANGE)(SHOP) An internet hub where qualified employers and individuals can shop for private health coverage. It is intended to attract uninsured through the use of subsidy and tax incentives based on income. Some States will manage their own Exchange. Florida will not have an Exchange in Florida will participate in the Federally Facilitated Exchange. 8
9 WHAT FINANCIAL ASSISTANCE IS AVAILABLE FOR FAMILIES? Advanced Premium Tax Credit Subsidies exist for households with annual income between 100% and 400% of the Federal Poverty Level (FPL) Premium Tax credits and subsidies are based on the premium of the SECOND lowest silver plan offered in an area. Some plans qualify for cost sharing reductions (CSR) Cost-Sharing Reductions are a subsidy that reduce out-of-pocket expenses for low-income households. Eligibility Criteria for CSRs: Enrolled in a Silver QHP through the Marketplace Household income between 100 and 250 percent FPL Receiving the Premium Tax Credit Subsidy 9
10 WHAT FINANCIAL ASSISTANCE IS AVAILABLE? Based on 2013 Federal Poverty Level % Single Family 4 % of income paid for health coverage Type of Subsidy $45,960 $94, % No Financial Assistance $34,470 $70, % Advanced Premium Tax Credit $28,725 $58, % Advanced Premium Tax Credits $22,980 $47, % and Cost Sharing Reductions $17,235 $35,325 4% Less than 133 $15,282 $31,322 2% Medicaid in some States (Not Florida) 10
11 HEALTH INSURANCE MARKETPLACE (EXCHANGE) OVERVIEW 11 FF-SHOP Marketplace (Small Groups) (Individuals) Open Enrollment effective dates are 10/1/13-12/15/13-EFFECTIVE JANUARY 1, 2014 Open Enrollment continues 12/16/13 3/31/14-EFFECTIVE 1 ST OF FOLLOWING MONTH SHOP enrollment for Small Group Enrollment will be tied to Group Anniversary Date. NOTE: Applications received prior to 15th of month effective following month.
12 HEALTH INSURANCE MARKETPLACE FOR INDIVIDUALS 12 Allows individual consumers to determine eligibility for financial assistance and/or public health programs, and provide information and support for them to evaluate and enroll in health plans Three step process: Consumer completes Marketplace application Marketplace makes eligibility determination Consumer enrolls in Qualified Health Plan (QHP) Consumer provides demographic, income, dependent information Marketplace supports online, mail, phone, or in person applications Application routed to HHS data hub to validate income, citizenship status Marketplace provides eligibility results and amount of premium tax credit available* Online tools and in-person support available to perform plan comparison Enrollment and tax credit information sent to issuer of selected QHP
13 QUALIFIED HEALTH PLANS Florida will be offering plans through a Federally Facilitated Exchange managed by CMS. Health plans must be certified by the Exchange as Qualified Health Plans (QHPs). QHPs must meet certain minimum standards. Plans must include pediatric vision benefits. Plans must include pediatric dental benefits unless a stand alone dental plan is offered in the area. FHCP will offer the same plans on and off the exchange. 13
14 METAL BENEFIT PLANS, COVERAGE LEVELS 14 Metal Level AV of covered services AV of member cost sharing Higher Premium Platinum 90% 10% Gold 80% 20% Silver 70% 30% Bronze 60% 40% Lower Premium Metal Level is determined using Actuarial Value (AV) Actuarial value is the relationship between the amount the Issuer pays vs. the member s out of pocket costs. Issuers use an Actuarial Value Calculator to determine plan Metal Level.
15 ESSENTIAL HEALTH BENEFITS Plans must include 10 Categories of Benefits : Ambulatory Patient Services Emergency Services Hospitalization Maternity and Newborn Care Mental Health/Substance Abuse Prescription Drugs Rehabilitative and Habilitative Services and Devices Laboratory Services Preventive and Wellness Services Pediatric Services Including Oral and Vision Care FHCP WILL ALSO OFFER GYM ACCESS/WELLNESS PROGRAMS IN BOTH INDIVIDUAL AND GROUP PLANS. 15
16 HEALTH BENEFIT CHANGES 16 Market-Wide Reforms-Individual, Small Group, Large Group Guarantee issue, guarantee renewability No preexisting condition limitations No lifetime maximums or annual limits* Out of pocket maximums limited to $6,350 / $12,700 $2500 limit on FSA contributions* Other - clinical trials, mental health parity Individual Only Child-only enrollment on marketplace Maternity (Part of EHB) Small Group Only $2,000 / $4,000 maximum deductible (flexibility for bronze plans) Individual and Small Group Only Metal level plans (Platinum, Gold, Silver, Bronze) Essential Health Benefits (EHBs) Qualified Health Plans Small Group and Large Group Only Maximum 90 day waiting period* NOTE: issuers/carriers who do not integrate these new benefits into their plans face a penalty of $1,000 per member per day. * Applies to grandfathered plans too
17 UNDERWRITING AND RATING RULES No one can be denied health coverage based on health status or pre-existing conditions. Health Plans cannot change premium rates based on health status, claims experience, gender, group size etc. The only factors that may be used to adjust premiums are: Age Family Tobacco Use Geography Plan premium rates can vary within a ratio of 3:1 for adults 21 and older. Each member of the family is individually rated. Rates vary for children under 21. A family cannot be charged for more than 3 children regardless of the number of children in the family. Premium rates can be increased by up to 50% for tobacco use. FHCP will meet with each group prior to renewal to let them know what this means to them. 17
18 SMALL BUSINESS HEALTH OPTIONS PROGRAM (SHOP) 18 Allows small employers with up to 50 full-time employees* to purchase health insurance coverage for employees and provide support for administrative functions related to billing and payment Three step process: Employer completes SHOP application Employee reviews and enrolls in SHOP QHP SHOP performs administrative functions starting in 2015 ADVANTAGES DISADVANTAGES Employers who qualify for Premium Tax Credits can only obtain the credit if they go through SHOP. SHOP supports online, mail, phone, or in person applications. Online tools and in-person support available to perform plan comparison. In 2014 Employers will be able to select ONLY 1 plan from 1 carrier if they purchase through SHOP. Employers will not be able to offer multiple carriers in The exchange will charge a 3.5% access fee. *States can continue to use their definitions for the number of employees in a small group (50) until As of January 1, 2016, small groups will be defined as up to 100 full-time employees.
19 SMALL EMPLOYER TAX CREDITS Small Employers may be eligible for Small Employer Tax Credits if they: Offer health coverage to employees; Employ less than 25 FTEs; (FTE 30+hours a week) Contribute at least 50% toward premium cost of employee coverage; Average annual employee wage must be less than $50,000 a year, and; Employers must participate in SHOP to receive this credit. 19
20 SMALL EMPLOYERS 1-50 Employer groups who employ under 50 full time employees will not be subject to penalties Employers have Options: DO NOTHING: Grandfathered plans can continue as is Non-grandfathered benefit plans will change to conform to HCR standards FHCP will be offering products to meet the requirements of the legislation ON and OFF the exchange Plan and benefit options will be presented to Employers during the 2014 renewal cycle FHCP will go over all changes prior to renewal BUY COVERAGE THROUGH THE EXCHANGE (SHOP) Exchanges for Small Employers will be available after October For 2014 employers will be able to choose only 1 plan for their employees. Enrollment will be the first of the month OR the group anniversary date. Have its principal place of business or an enrollee worksite in the SHOP s Service Area. Have at least 1 employee. (Sole proprietors may enroll through the Individual marketplace. ) 20
21 LARGE EMPLOYERS 50 + FTES Employers must offer coverage that meets certain criteria. Employer coverage must meet minimum value, covering at least 60% of the cost of covered services. (Bronze level or above.) Coverage must be considered affordable. Employee share for single coverage cannot exceed 9.5% of W-2 wages. Penalties may be assessed if coverage doesn t meet minimum standards. Penalties have been suspended for
22 EMPLOYER PENALTIES This provision has been delayed until Stay tuned! Examples Penalty Amount A large employer does not offer coverage, but no full-time employees receive credits for exchange coverage. NO None The large employer has 51 employees and does not offer coverage, and one or more full-time employees receive credits for exchange coverage. The annual penalty calculation is the number of full-time employees minus 30, times 2,000. In this example the employer penalty would be YES 51-30=21 21X$2,000= $42,000 The large employer offers coverage and no full-time employees receive credits for exchange coverage. NO None When an employer offers coverage that meets minimum value and is affordable, their employees should not be able to qualify for credits through the Exchange, however, if one or more full-time employees receive credits for exchange coverage: The number of full-time employees receiving the credit is used to calculate the penalty. The penalty is the lesser of : The number of full-time employees, minus 30, multiplied by $2,000 or; The number of full-time employees who receive credits for exchange coverage multiplied by $3,000. If 10 employees receive credits for coverage. The penalty would be $30,000 YES The lesser of : 51-30=21 21 X $2,000= $42,000 OR 10 X $3,000= $
23 90 WAITING PERIOD 23 For plan years starting in 2014, all group employers cannot have a waiting period that exceeds 90 days (coverage must be effective no later than 91 st day) 90 day maximum waiting period applies to: Large and Small Group Employers Insured and Self-Insured Grandfathered and Non-Grandfathered All employees eligible for coverage 90 day count down starts on date employee is eligible for coverage, typically date of hire. In order to account for first of the month effective dates, many employers are converting to a 60 day waiting period. Method Effective/Add Available Waiting Period Counts Actual Days Date of Event 0-90 Counts Actual Days 1 st of the Month 0-60 Available waiting periods 0,30,60
24 PLAN YEAR VERSUS CONTRACT YEAR 24 The Affordable Care Act (ACA) market reforms generally apply to group health insurance coverage issued or renewed for plan years beginning on or after January 1, HHS defines Plan Year as the dates listed in a group s Summary Plan Description as required under ERISA*. In 2014, we are required to implement ACA mandated benefits at the start of the group s Plan Year. Mandates are usually applied at the groups contract year/renewal date. Florida Health Care Plan does not currently collect data on groups Plan Years. Florida Health Care will assume a group s Plan Year is the same as their Renewal Year unless told otherwise. * Most private employers are subject to the federal law known as ERISA (Employee Retirement Income Security Act of 1972) if health benefits are offered to their employees. 24
25 25 WHAT IS FHCP DOING TO HELP GROUPS? FHCP is creating an on-line Employer tool kit that contains important forms/information to help Employers. FHCP will have an on-line estimator that will assist members determine whether they might qualify for subsidy and how much. FHCP will have an on line estimator to help employers determine if their plans meet Minimum Value. FHCP will have a portfolio of products that will be available on and off the exchange for Individual and Small Group clients. FHCP will offer Products with and without Pediatric Dental and Vision and Gym access. FHCP is monitoring regulations regularly to ensure products and services are in compliance.
26 26 ROLE OF AGENTS IN THE FEDERAL EXCHANGE Agents will continue to play a major role helping their clients shop, purchase and enroll in insurance offered on the federal Exchange Compensation for plans offered through a federal Exchange must be equal to the amounts paid for the same plan outside the Exchange Agent requirements and process: Register with the Exchange Complete required training on the range of Qualified Health Plan (QHP) options and insurance affordability programs Comply with Exchange privacy and security standards Comply with existing state licensure and appointment laws The Marketplace and SHOP will only include information on licensed agents that have successfully completed registration and training
27 27 WHAT WILL FHCP DO FOR AGENTS? FHCP values our brokers/agents and will continue to compensate at the same levels as Florida Blue. FHCP is creating an on-line Employer tool kit that contains important forms/information to help Employers. FHCP will have an on-line calculator that will assist brokers/agents determine whether clients will qualify for subsidy and how much. FHCP will have an on-line calculator to assist brokers determine the AV of plans. FHCP will have a portfolio of products that will be available on and off the exchange for Individual and Small Group clients. FHCP will offer Products with and without Pediatric Dental and Vision and Gym access. FHCP is monitoring regulations regularly to ensure products and services are in compliance.
28 BROKER TOOLS 28 Florida Blue maintains a robust Broker Portal containing valuable information about ACA. Florida Health Care plan is developing a Broker toolkit and will display it on FHCP s website under the Broker tab. We value our relationship and hope that FHCP is the best choice for your clients in Volusia and Flagler Counties. We appreciate your input and suggestions to make us better. Together FHCP and Florida Blue have something for everyone. We bring the best solution for your clients. WE HAVE BEEN CARING FOR OUR COMMUNITY FOR 40 YEARS.
29 RESOURCES Resource CCIIO-Center for Consumer Information and Insurance Oversight- Health Insurance Market Reforms CMS Health Insurance Marketplace HealthCare.gov website HealthCare.gov State Marketplace Information Resource Link Department of Labor THE BEST PLACE TO RECEIVE UP TO DATE INFORMATION ABOUT HOW THIS AFFECTS YOU IS TO CONTACT FHCP OR FLORIDA BLUE. 29