HealthCare HealthCare Reform (PPACA)Reform (PPACA)

Employer MandateEmployer MandateEmployees are impacted by Employer decision to offer

healthcare – • Employee enrolling in non-compliant plan faces penalty• Employer offering compliant plan voids employee chance for

subsidy

If Employer wants to offer compliant plan for employees, they need to meet two provisions of Employer Mandate:

Affordability Actuarial Value

AffordabilityAffordabilityRule: An employee cannot pay more than 9.5% of their household income for health insurance

Safe Harbor Employee only coverage Employee’s W-2 earnings

Example: An employee earning $11.50 an hour ($23,920 annually) cannot pay more than $190 per month; $23,920 x 9.5% ÷ 12

Actuarial ValueActuarial Value

Rule: The health plan must cover at least 60% of the actual cost of healthcare

•Combination of co-pays, deductibles, co-insurance, out-of-pocket maximums and drugs

•Out-of-pocket maximums cannot exceed $6,350 per individual and $12,700 per family

How Many Employees?How Many Employees?

Full time employee is any employee working at least 30 hours per week

FTEE is calculated by aggregating all part-time hours for a month and dividing by 120

FTE = “above/below” 50??Subject to change

Transition PeriodTransition Period

When does your plan have to be compliant for your employees to avoid having to pay a penalty?

•Employers< 50 employees have until their plan renews in 2014

•Employers> 50 employees have until January 1, 2016 – REVISED February 2014

Employers < 50 EmployeesEmployers < 50 EmployeesProvided by UHC

• Transition Period

• Early renewals, December 1

• Delay impact of HCR until 2014

• Non compliant plans will not be offered in 2014

Community RatingCommunity RatingProvided by UHC

Currently groups are evaluated by:age, sex, zip code, plan design and then adjusted by risk5:1 age band

Community rating eliminates:gender and risk adjustment3:1 age band

Increases of 30% or more predicted

Employers < 50 Employees Employers < 50 Employees 2014 Expectations 2014 Expectations

• Community Rating

• Plan Compliance• Individual Age Rates

• Projected 2014 Rate Adjustments 40 groups Predominantly two carriers Average projected increase 62%

Employers> 50 EmployeesEmployers> 50 Employees

• Pay or Play delayed until 2016

• Reporting delayed until January of 2015

• No transition period (could change)

Federal Health Exchange Federal Health Exchange NoticeNotice

• Delivered to employees by October 1

• No penalty if not delivered, but….

• Must state if plan meets actuarial value of at least 60%

• Most will leave page three blank

• Must be provided to new hires going forward

Health Exchanges in NCHealth Exchanges in NC

• Federally run virtual marketplace where individuals can purchase health insurance for themselves and their families• State Based Model• Partnership Model• Full Federally Facilitated Model

• Open enrollment is October 1, 2013 thru March 31, 2014

Health Exchanges in NCHealth Exchanges in NC

NC and SC are Federally Run Exchanges Carriers

BCBSNCCoventry

55 plan designs offered Plans offered will vary by zip code

Individuals will only see what is available to them

Plan CharacteristicsPlan Characteristics

Co-pays, deductibles, etc. accumulate to out of pocket maximum

Wellness covered at 100% 5 tier Rx plans, generic to have two levels Pediatric Vision

Routine eye examOne pair eyeglasses w/ frame or contacts

Metal PlansMetal Plans

Platinum 90% Actuarial Value Low co-pays Low out of pocket

Gold 80% Actuarial Value Low co-pays High out of pocket

Silver 70% Actuarial Value Co-pays available Max out of pocket

Bronze 60% Actuarial Value Some Co-pays/H.S.A.

Plans Max out of pocket

Plan DesignsPlan Designs BCBSNC Offer variety of plans including traditional

PPO, HSA’s and limited network plans 2 Platinum, 5 Gold, 11 Silver, 6 Bronze, 2

Catastrophic

Coventry 1 Gold, 1 Silver, 2 Bronze, 1 Catastrophic Big emphasis on limited network plans in

Charlotte and surrounding area, lowest cost

Federal SubsidiesFederal Subsidies• Individuals with no access to a compliant

group plan are eligible

• Individuals with household incomes from 100% to 400% of the Federal Poverty level are eligible

• Thresholds:

• $46,000 for individuals

• $94,250 for family of four

Federal SubsidiesFederal Subsidies Individuals with incomes less than $23,000 and

families of four with less than $47,000 could be eligible for plans that cost $0

Individuals that fall under 250% of the Federal Poverty Level will see their out of pocket expenses reduced on Silver Plans only.

Individuals will pay their monthly “net premium” to the appropriate insurance company

The government will pay the difference

Federal SubsidiesFederal Subsidies

Individuals are not eligible to receive a subsidy if they have access to a compliant group plan at their place of work or their spouses.

EnrollmentEnrollment

www.healthcare.gov Directly with carriers

Verification of individual“Honor system” of income and access to

coverageEnrollment could take 20-60 minutesPay premium to process application

Enrollment AssistanceEnrollment Assistance

First time buyers Limited network plans Need to know all of their options

Some enrollers represent only one company Transition period allows individuals to

enroll when company plan renews

Your Plan and HCRYour Plan and HCR In 2014 there will be “spot checks” to make

sure individuals are actually eligible for subsidies

Insurers will relax their eligibility requirements Employers with strong plans and contributions

should encourage employees to investigate the exchange

Once an employee enters the exchange, it could be tough to get them back

Your Plan and HCRYour Plan and HCR Develop a two year plan with Senior

Management What are your expected costs (increases)? How can we stay compliant? What would it mean if we dropped heath

insurance? Spouses What other plans are available?

Communicate with employees Ask more from your advisor If you allow your employees to go to the

exchange, make sure that they see all options