Eugenie Guillot Sales Director Coventry Health Care Public Domain

Eugenie GuillotSales Director

Coventry Health CarePublic Domain

Health Care ReformWhat You Should Know

Introduction

2012 – Recap

2013 and 2014

– FSA Limits

– Health Insurance Marketplace

– SHOP

– Essential Health Benefits

– Actuarial Value

– Employer Shared Responsibility

– ACA Fees & Taxes

– Community Rating

2015-2018

©2013 Coventry Health Care. All rights reserved.

Coventry Health Care and the Affordable Care Act

Coventry Health Care is your partner in navigating health care changes associated with the Affordable Care Act (ACA). We are pleased to partner with the Jefferson Chamber of Commerce to assist business owners in understanding the impact this law will have on their business and employees.

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Timeline of Changes Affecting Group Commercial Market


2012 2013 2015 2016 2017 20182014

Women’s Preventive Services, Medical Loss Ratio (MLR), SBCs, W-2 Reporting

FSA Limits, Partnership Exchange Deadline, Final exchange Rules, PCORI Fee, Electronic Health Transaction Rules

Waiting Period Limitation Rules, Employer Coverage Mandate, Health Exchange Established, Essential Health Benefits, Health Benefit Standards, Subsidies for Individuals, Insurance Market Rules, Health and Wellness Rewards, Annual Health Insurance Industry Fee, State Risk Pool Requirement, Transitional

Reinsurance Fee, Risk Corridor Program Established, Risk Adjustment Program and Fee, Small-Group Participation in State Exchanges

Independent Payment Advisory Board Established

State Health Choice Compacts Allowed

Large-Group Participation in State Exchanges

Cadillac Plan Tax Imposed


ACA Changes Implemented in 2012

• Women’s preventive services• Medical Loss Ratio (MLR) • Summary of Benefits and Coverage (SBC)



Women’s Preventive Services

For non-grandfathered plans, the following preventive care services are included without cost sharing when received in-network:

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• Well-woman visits • Screening for gestational diabetes • Human papillomavirus (HPV) DNA

testing for women 30 years and older • Sexually transmitted infection

counseling • Human immunodeficiency virus (HIV)

screening and counseling • FDA-approved contraception methods

and contraceptive counseling (subject to standard medical management and formulary restrictions)

• Breastfeeding support, supplies and counseling

• Domestic violence screening and counseling

Visit www.CHCLA.com for more information on women’s preventive services.

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http://www.CHCLA.com/


Medical Loss Ratio (MLR)

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• Health insurers report MLRs to the federal government by June 1 each year– MLR is the percentage of premiums spent on medical care– If a health insurer does not meet a minimum MLR threshold, a

rebate payment is due to policyholders– The MLR threshold is 85% for large groups and 80% for small

groups and individual policies • Health insurers must issue rebates by August 1 each year if

they do not meet the required threshold in the specified market

• MLR reporting will be ongoing

Visit www.CHCLA.com for more information on MLR.




Summaries of Benefits and Coverage (SBCs)

• SBCs include information like deductible amounts and coinsurance and copayment obligations• Employer groups must distribute SBCs to participants

and beneficiaries• If off-renewal plan changes affect SBC information,

notification must be provided to members no later than 60 days before the changes take effect

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Visit www.CHCLA.com for more information on SBCs.



ACA Changes to be Implemented in 2013 and 2014



FSA Limits: January 1, 2013

• $2,500 limit imposed on employee contributions to FSAs– Adjustments for inflation in future years– Limit does not include employer contributions



The Health Insurance Marketplace

• In initial year, open enrollment will be six months: October 1, 2013, through March 31, 2014

• In following years, open enrollment will be from October 15 through December 7

• Assistance available for individuals– Premium tax credits

– Cost-sharing subsidies

Beginning in 2014, individuals and small businesses with up to 50 employees can purchase insurance through a health insurance marketplace. In 2016 businesses with up to 100 employees can also participate.



Health Insurance Marketplace

Employers will be required to notify employees about coverage options available through the Health Insurance Marketplaces.

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• The Labor Department recently postponed the deadline for this requirement until late summer or early fall 2013

• The Labor Department is considering: Providing generic language that employers can use to

notify employees Allowing employers to use a coverage template that will be

available on the Marketplace website



Small-group plan by state’s choice (21)State employee health benefit plan (2)

HMO plan (4)

Defaulted to small-group plan (state made no choice) (24)

The Health Insurance Marketplace (continued)

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• States deciding on the establishment of state or federally run marketplaces and their benchmark plans

• Creates four levels of coverage– Bronze, Silver, Gold and Platinum

• Requires all plans to cover “essential health benefits”– Plus a Catastrophic Plan available to those under age 30



Small Business Health Options Program

• Small-group participation in health insurance marketplaces– States directed to create Small Business Health Options

Program (SHOP Marketplace)

– In 2014 and 2015, small businesses with less than 50 employees may participate in the SHOP

– In 2016, small businesses with up to 100 employees may purchase coverage through SHOP


©2013 Coventry Health Care. All rights reserved.14

Essential Health Benefits

The ACA requires non-grandfathered small-group and individual plans both inside and outside health insurance marketplaces for plan years beginning on or after January 1, 2014, to cover a set of health services and benefits called the Essential Health Benefits Package. These include: Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use

disorder services, including behavioral health treatment

Prescription drugs Rehabilitative and habilitative

services and devices Laboratory services Preventive and wellness services

and chronic disease management Pediatric services, including oral and

vision care

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Visit www.CHCLA.com for more information on essential health benefits.



Actuarial Value

The ACA also requires that the EHB package is offered at four levels of coverage:


Level of coverage Actuarial value

Platinum 88%-92%

Gold 78%-82%

Silver 68%-72%

Bronze 58%-62%

Actuarial value:The average percentage a health plan will pay of an enrollee’s health care expenses.


Minimum Value and Affordable Coverage Provisions

• Minimum value definition: A health plan that covers at least 60% of the total allowed cost of benefits that are expected to be incurred.– IRS and HHS have developed a calculator for employers to

use to help determine if the coverage they offer their employees meets the definition of minimum value.

• Affordable coverage definition: When an employee’s share of the premium for employer-provided coverage costs the employee 9.5 percent or less of their wages.



Employer Shared ResponsibilityEffective January 1, 2014



Employer Shared Responsibility (continued)

Effective January 1, 2014

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Visit www.CHCLA.com for more information on issues affecting employers.



Comparative Effectiveness

(PCORI)

Annual Health

Insurer Tax

Risk Adjustment

Fee

Transitional Reinsurance Program Fee

Exchange (Marketplace)

User Fees

National Total • $200MM annually• $1 PMPY (FY2013)• $2 PMPY (FY2014)

• $8B (2014)• $11.3B (2015-16)• $13.9B (2017)• $14.3 (2018)

• No national total • $10B in 2014 ($+2B)• $6B in 2015 (+2B)• $4B in 2016 (+$1B)

• No national total

Key Facts • Starts 10/01/2012• Indexed to NHE growth• Sunsets in 2019• MLR exempt• Payable to IRS by plan sponsor

• Levied by prior year market share based on net premiums• NFP taxed at 50%• MLR exempt

• Fee imposed on all exchange plans

• Only individual market plans (inside/outside exchanges) eligible• States may require supplemental fees• Flat per capita fee

• Exchanges must be self-sustaining from a funding perspective starting in 2015

PMPM Est. $0.17 TBD $0.08 $5.25 Up to 3.5% in FFE

Fully Insured - SG & IND inside and outside

- exchange only

ASO Medicare CCP Medicare Part D Medicaid



Taxes/Fees Impacting Premium in 2014


Community Rating

Beginning on January 1, 2014, rates may vary only based on the following:

Whether the plan or coverage covers an individual or family Rating area Ageo Rate must not vary by more than

3:1 for like individuals of different age who are age 21 and older

o Variation in rate must be actuariallyjustified for individuals under age 21, consistent with a uniform age rating curve. A state may use a narrower ratio with approval by CMS.

Tobacco use, except that such rate shall not vary by more than 1.5:1 for like individuals who vary in tobacco usage. A state may use a narrower ratio with approval by CMS.


Total premium for a family is determined by adding the premium

for each member:

Rate for 50-year-old adult who smokes

+Rate for 48-year-old adult nonsmoker

+Rate for 16-year-old minor


ACA Changes to be Implemented 2015-2018



2015-2018 Changes

• Insurance Payment Advisory Board January 15, 2015– Independent Payment Advisory Board created to submit

recommendations to Congress to slow growth in national health expenditures• Recommendations to reduce Medicare spending in 2014

• State health choice compacts allowed January 1, 2016– States permitted to form health care choice compacts– Allow insurers to sell policies in any participating state



2015-2018 Changes (continued)

• Large-group participation in state health insurance marketplace January 1, 2017– States may allow employers with more than 100

employees to be part of state health insurance marketplace by purchasing coverage through the Exchange

• Cadillac excise tax 2018 plan year– A 40 percent excise tax imposed on “Cadillac” health

plans when value of coverage exceeds $10,200 for individual and $27,500 for families.


Visit www.CHCLA.com for more information on health care reform.

The information contained in this presentation does not constitute legal advice. The law changes very rapidly and, accordingly, Coventry recommends that you seek advice from your legal counsel and/or

tax advisor as it pertains to you and your business. Nothing that you read or is provided in this document should be used as a substitute for the advice of competent legal counsel.

Documents

Eugenie Guillot Sales Director Coventry Health Care Public Domain