Healthy Nonprofit Chat

Phil Boyle

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Seminar Agenda

• Overview of the Affordable Care Act (ACA) • An Update on the Connecticut Health Insurance Marketplace• Office of the Healthcare Advocate – Oversight of Navigators• Effect of PPACA on Nonprofit Agencies – Small/Medium/Large• Discussion of “Pay or Play” Guidelines for Agencies with more than

50 Full Time Employees• Questions

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Basic introduction to PPACA

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Basic introduction to PPACA

• The ACA aims to expand coverage in 2014 through a series of provisions:

– Individual mandate: Mandates that all Americans maintain a minimum level of health coverage or face a tax penalty

– Insurance Marketplace: Creates state-based health insurance Marketplace and provides federal premium tax credits and cost-sharing subsidies to assist low- and moderate-income individuals without affordable employer-sponsored insurance in obtaining health coverage

– Medicaid expansion: Expands Medicaid up to 133% of federal poverty level

– Employer mandate: Mandates, for the first time, that employers with 50 or more full-time employees offer coverage or pay tax penalties

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Key Affordable Care Act (ACA) Provisions

• No medical underwriting• No denial of coverage due to a pre-existing condition• Minimum medical loss ratio (“MLR”) established• No more than a 90 day waiting period for new hires• Minimum coverage requirements (Essential Health Benefits)• Extensive preventative services provided at no cost• Elimination of industry and gender rating• Qualified plans evaluated and given seal of approval• Plans organized in metal tiers – bronze, silver, gold and platinum

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Status of State Insurance Marketplace

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What is a Marketplace?

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What Is A Health Insurance Marketplace?

• An organized marketplace for insurance plans to compete and offer services efficiently in the small group and individual markets.

• Provides a level playing field for health insurance plans to comply with benefit requirements and consumer protections required under the Affordable Care Act (ACA).

• Creates a new option in the marketplace to facilitate competition

Source: Healthcare.gov

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Health Plans in the Marketplace

• Health plans must be certified to be offered in a Marketplace, and must meet certain minimum standards.

• Health plans will be standardized in 4 coverage tiers based on the percentage of the total allowed cost of benefits paid by a health plan on average: –Bronze: Plans cover 60% of the costs –Silver: Plans cover 70% of the costs –Gold: Plans cover 80% of the costs –Platinum: Plans cover 90% of the costs

• A Catastrophic plan will be offer for consumers under the age of 30

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Types of Marketplaces: Three

The ACA provides states with 3 different options

1) State-Based Marketplace• 18 states, including the District of Columbia

2) Federal Partnership• 7 states

3) Federal Default Program• 26 states

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Status of State Marketplaces

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Status of Connecticut Marketplace

• July, 2011– Governor Malloy signs Public Act 11-53, the enabling

legislation, which established the Connecticut Health Insurance Exchange

• February 2012 – Standard Health Plans were initially considered

• October 1 – 2013 – Open Enrollment to begin (AHCT begins to function as a marketplace when open enrollment begins)

• January 1, 2014 Enrollees begin to receive care under their qualified health plan.

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Vision and Mission

• Vision:To increase the number of insured residents, improve health

care quality, lower costs and reduce health disparities through an innovative, competitive marketplace that empowers

consumers to choose the health plan and providers that give best value.

• Mission:– Build awareness of the law (ACA) and Access Health CT.– Educate individuals and businesses how they can benefit from

the AHCT– Reduce the number of the uninsured– Deliver an exceptional customer experience that is easy, simple

and transparent– Foster long term favorability of AHCT

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There will be numerous options to enter into this Marketplace

• Individuals and small businesses can purchase their insurance through any method they feel comfortable with, such as

• Brokers• In Person Assistors• Navigators• Call Center• Web Portal

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Individuals

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A “Snapshot” of Connecticut today

• 9.6% of State Residents are Uninsured• 334,000 Individuals, Including 60,000

children• 600,000 Medicaid enrollees, currently• Medicaid Eligibility Expansion up to 138%

of the Federal Poverty Level.• Projected Medicaid Increase of 100,000

Enrollees• Expect to Engage 80k-100K residents in

state exchange in the first year» Majority newly eligible for

subsidies» Approximately 10%-20% will be

small business enrollees

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The Big Picture for Individuals

The Affordable Care Act (ACA) is a federal law that requires most US citizens and legally documented US residents to have health insurance. The law goes into effect as of January 1, 2014.

American Citizens not covered under a government plan will have three options for health insurance in 2014:

1. Get coverage through their employer if available

2. Buy an individual plan through the marketplace (Purchaser may be eligible for subsidy)

3. Go uninsured (will pay penalty unless they qualify for an individual exemption)

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Commercial Carriers offered in Individual Marketplace

• Aetna

• Anthem Blue Cross

• Connecticare

• HealthyCT

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Individuals may be eligible for a subsidy

• Subsidies are only available through the Exchange.• To be eligible, individuals must

– Not be eligible for Medicaid– have incomes below 400% of the federal poverty level (FPL), – not have access to minimum essential health coverage through their

employer, or– have access to coverage, but it is not affordable.

• Premium credits are available for any metallic level plan. • Cost sharing subsidies are through the Silver Plan only.• Most subsidies are expected to cover individuals between 133%

and 400% of the federal poverty level (FPL).

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Is Financial Assistance Available in the Marketplace?

•Advance premium tax credits: –Lower the monthly premium amount an individual pays

throughout the year. –Available to eligible individuals with household incomes between 100% and 400% of the FPL ($45,960 for an

individual and $94,200 for a family of 4 in 2013), and who don’t have access to health insurance coverage that qualified as “minimum essential coverage”.

–Based on household income and family size for the taxable year. –Paid each month by the federal government to the insurer. –Reconciled on the taxpayer’s tax return after end of year of coverage year.

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Is Financial Assistance Available in the Marketplace? (cont’d.)

• Cost-sharing reductions:

–Reduces out-of-pocket expenses such as deductibles, copayments and coinsurance.

–Generally available to enrollees in Silver level plans with income between 100% ($11,490 for an individual and $23,550 for a family of 4 in 2013) and 250% FPL ($28,725 for an individual and $58,875 for a family of 4 in 2013).

–Based on household income and family size for the taxable year.

–Also available to American Indians/Alaska Natives.

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How Does the Exchange Work?

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When Can Individuals Enroll?

• First Open Enrollment –October 1, 2013 - March 31, 2014 –Coverage starts January 1, 2014 for plan selections made by December 15, 2013

• Annual Open Enrollment (after first year) –October 15 - December 7 –Coverage begins January 1 of the next year

•Consumers eligible for Medicaid and CHIP can enroll at anytime.

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Federal Regulations on Consumer Assistance in State-Based Exchanges

• All Exchanges must provide consumer assistance

• Outreach and Engagement Efforts

– Information provided must be in plain language that is readily accessible, culturally and linguistically appropriate to consumers

– Educate consumers about the Exchange and about the available subsidies to encourage participation

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Office of Healthcare Advocate

Navigator and Assister Program Access Health CT created a unique partnership with

the Office of the Healthcare Advocate to help individuals access health insurance.• Designed to provide support through linguistically and

culturally appropriate community engagement initiatives and outreach programs.

• Trusted community-based organizations help consumers enroll in the health insurance plan that is best for their families.

Navigator and Assister Program Team of six Navigators and 300 Assisters

Enroll Consumers in Medicaid or in a Qualified Health Plan and help them to be informed consumers for the future

Partnerships with community organizations

Bring the health coverage marketplace directly to people

Navigators/Assisters Roles Six Navigators provide support to the Assister organizations in their respective region:

Fairfield County; Hartford County; New London and Middlesex Counties; Litchfield County New Haven County; and Tolland and Windham Counties.

300 Assisters from health departments, community organizations, nonprofits, faith-based institutions, and small businesses throughout the state. Receive Federal grant to help their communities access health insurance Individuals have completed background checks, 34 hours of training and received certification Supervised by their organization and the Navigator in their region Educate and empower consumers so they can make informed decisions and self-advocate Assisters do not recommend health insurance plans Engage community leaders and influencers to promote health in all forms Use data and measurable outcomes to improve the system

CONTACT USNavigator and Assister Outreach Program

280 Trumbull Street, 15th FloorHartford, CT 06103

outreach.ahct@ct.gov860-757-6800

Visit us Onlinewww.AccessHealthCT.com/OutreachPrograms

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Small Employers

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The Big Picture for Small Employers

• Employers who have 49 or fewer full time equivalents will have several health insurance options in 2014:

1. Offer a fully insured plan through either:

• A SHOP exchange – Employer may be eligible for a tax credit to offset part of the employer premium contribution

• The off-exchange marketplace

2. Stop offering coverage and let employees buy through the marketplace

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The SHOP

• Currently, the following insurance carriers have said they will participate in the SHOP:– Anthem– Connecticare – HealthyCT– United Healthcare

• SHOP will have multiple health plan options, including bronze, silver, gold and platinum plans.

• Small Businesses Owners can decide to have their employees purchase vertically, horizontally or use a single choice.

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The SHOP

• The SHOP will be administered by HealthPass.

• Small businesses will have consolidated billing.

• No Membership Fee will be charged to participate in the SHOP.

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The SHOP

• Employers can decide how much to contribute toward premium costs.

• Employers can collect employee share of premiums through payroll deduction.

• Premium contributions can be made with pre-tax dollars.

• Tax Credits for Small Businesses and Nonprofits can only be obtained through the Connecticut Health Insurance Marketplace.

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Business Tax Credit Beginning in 2014

• Small business tax credit continues and is more generous, but limited for any eligible employer to 2 years

– Maximum tax credit increases from 35% to 50% for taxable employers

– Maximum tax credit increases from 25% to 35% for non-taxable employers

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Qualifying for the Small Business Tax Credit

• Contribution to health care coverage– Do you cover at least 50% of the cost of health care coverage for your

workers based on the single rate?

• Firm size– Do you have fewer than 25 Full Time Equivalents (FTEs)

• Average annual wage– Do you pay average annual wages below $50,000?

• Both taxable (for-profit) and tax-exempt organizations qualify

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Calculating the Small Business Tax Credit

• Firm Size (FTEs) = Total Full Time Employees + (Total Annual Part Time Hours/2080)– Owners are excluded from FTE count and employer cannot receive tax

credit for owner’s insurance– All employee hours counted and based on 40 hour week

• Wages = Total Wages Paid/ FTEs– Owner and family member wages are excluded from total wages

• Maximum Small Business Tax Credit– Up to 50% of a small business' premium costs in 2014 for two years– Up to 35% for tax-exempt employers (refundable via payroll tax) for

two years

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How to Determine Tax Credit (2014)

• Credit is reduced on a sliding scale:– As average wages increase from $25,000 to $50,000– As FTEs increase from 10 to 25

• Connecticut Health Insurance Marketplace will make a tax credit calculator available

• National Tax Credit Calculators are publicly available:

– http://www.smallbusinessmajority.org/tax-credit-calculator/

– http://www.nfib.com/advocacy/healthcare/credit-calculator

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Four Inputs for Small Business Tax Credit

• Input1. Full Time Employees2. Part Time Employee Total Hours3. Total Wages4. Employer Portion of Total Premiums

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Small Business Tax Credit : Illustration

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Small Business Tax Credit : Illustration

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Small Business Tax Credit : Illustration

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Example of IRS form for Small Employers

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Enrolling in SHOP: Who, When & How

Which small businesses are eligible? – In 2014: Businesses with 1-50 full-time-equivalent employees – In 2016: Business with up to 100 employees– Once a business enrolls, it can grow and still remain in SHOP

When can businesses enroll? – Starting October 1, 2013 for coverage beginning January 1, 2014

How can businesses enroll? – Through a Broker, OR – Directly through the SHOP

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Customer Support Services

1) An easy and simple web portal for small businesses and brokers to shop and compare for health insurance

2) Call center for eligibility, subsidy, selection, and enrollment assistance

3) Brokers still available for customer information and enrollment support

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Large Employers

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The Big Picture for Large Employers

• Employers who have 50 or more employees will have at least three health insurance options in 2014:

▪ Offer health insurance – either fully insured or ASO – that meets the minimum coverage definition (no essential health benefit or metal level requirements) and is affordable

▪ Offer some level of coverage that does not meet minimum requirements*

▪ Stop offering coverage and let employees buy through the marketplace*

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Employer Shared Responsibility Provisions: Key Definitions

•Full-Time Employee: an employee who is employed on average 30 hours or more per week (or at least 130 hours of service in a given month)

•Full-Time Equivalent (FTE) Employee: a combination of Employees, each of whom individually is not a full-time employee because they are not employed at least 30 hours per week, but who, in combination, are counted as the equivalent of a full-time employee.

–For example, two employees that work 15 hours/week are added together to equal one full-time employee.

•Controlled Group Employers: employers with common owners or who are otherwise related are aggregated together to determine whether they meet the threshold number of 50 or more FTE employees.

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Counting Hours—The Specifics

• The current DOL rules for counting hours for pension plan purposes will be used to count an employee’s hours of service as a full-time employee or full-time employee equivalent.

• Under these rules, a person is considered to have completed an

“hour of service” with each hour for which he is paid for work, vacation, holiday, sick time, layoff, jury duty, military duty, etc.

• When converting time to a monthly basis, 30 hours per week would mean 130 hours per calendar month.

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What about part time and seasonal employees?

• The employer responsibility requirements apply in a calendar year if the company averages at least 50 full-time or full-time equivalent employees during the prior calendar year:

– PT employees count towards the total on a pro-rated basis. You divide

the total hours of service of all employees who are not full-time for the month by 120

– Seasonal employees count towards the total for determining ER applicability unless: • The group’s workforce exceeds 50 full-time employees for 120 days

or fewer during a calendar year, and those seasonal employees are what put the employer over the threshold

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Who is an Employee? …What about Union employees?

• An employee is defined is “common-law employee.” This means independent contractors, directors and partners do not count. – We expect enforcement of misclassification of employees once ER

mandate starts. – Unclear how leased employees will be treated, but they may well be

the responsibility of the leasing entity. – There is no exception in the law for union employees or those who

receive coverage through a collective bargaining agreement.

• Union employees count in the total number of employees to determine ER applicability – If the ER mandate applies, the employer also is responsible to offer FT

employees coverage – Union employee issues will also likely be addressed in the forthcoming

rules

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What are the key Large Employer Notices?

• IRS Notice 2012-17 • IRS Notice 2012-58• IRS Notice 2012-59

• This guidance gives employers a lot of flexibility but it’s also very complex and hard to follow.

• Counting starts in 2013.

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IRS Notice 2012-58

• IRS Notice 2012-58, discusses a safe harbor method that employers can apply to newly hired employees.

• Permits “employers to adopt reasonable procedures to determine

which employees are full-time employees without becoming liable” for a penalty.

• Allows the employer to determines full-time status by looking back at a standard measurement period of 3-12 months chosen by the employer that can vary by class.

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Back to Employer Responsibility Requirements

• Minimum value standard will determine adequacy of coverage – Not the same as EHB/QHPs

• Affordable coverage means the employee’s share is less than 9.5% of household income. However, employers don’t need to use that standard to determine if their plan is adequate.

• The premium employers use to calculate affordability is the single employee rate for the lowest tier plan, regardless of how many dependents employee has covered on the employer plan or what plan the employee elects. The employer uses the employee’s W2 wage to calculate income, not the household income.

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Minimum Value

• Employer plans subject to the ER mandate have to ensure that their plan is of “minimum value”

• While “minimum value” is generally understood to mean a 60% actuarial value, it’s not the same thing as the Qualified Health Plan (QHP) requirements that will cover all individual and small group market plans (essential health benefits, metal levels).

• Administration is developing a calculator (similar but different than the QHP metal level calculator) and will also allow other methods of certifying minimum value of a plan.

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Coverage Affordability

• Coverage also must be “affordable” – The employee’s cost for coverage (self-only coverage) must not exceed

9.5% of family income. – Treasury has proposed a safe harbor for employers to consider the W2

wage rather than family income (Box 1)

• Employers may want to consider premium subsidy adjustments, as dependent coverage assistance is not factored into the “affordability” calculation

• Even in a small employer group, if the employee has a valid offer of affordable and quality coverage from their employer, they and their dependents are not eligible to go to the exchange and get subsidized coverage.

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Does Group Coverage Meet the Affordability Test?

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Recap of Employer Shared Responsibility Payment

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What are the Tax Penalties

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Will the Employer Pay a Penalty

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Questions to ask?

• What is your mix of full and part-time employees?

• Could an adjustment of employee status reduce your penalty exposure?

• Could the adjustment of premium subsidies to employees versus dependents make a difference?

• If you provide coverage today, how does the cost of that coverage compare to your total penalty exposure?

• Consider all options, including non-monetary concerns.

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Financial Calculators

• Many Producers and Brokers offer financial calculators that can tabulate potential penalties.

• TAX PENALTIES ARE NOT TAX DEDUCTIBLE.

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Other issues to remember…

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Some More Points to Consider

• There are no penalties or employer responsibility requirements now, yet most employers offer coverage today.

• Penalties do not fully offset coverage costs in exchange. • If employer increases salary to make up for lost benefits, employer

FICA tax obligations will also increase; whereas employer-sponsored benefits are excluded from income.

• Employers who offer coverage rarely, if ever have a 100% take-up rate. However, employers who fail to offer coverage pay penalties for 100% of eligible workers.

• If employees choose to remain uninsured rather than seek coverage, increased absenteeism may result.

• Furthermore, workers compensation costs may go up for what are actually non-work related health costs.

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Self-Funded Plans

An Introduction To ahCT Plan Designs

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Plan Designs Standard Bronze Standard Silver Standard Gold Standard PlatinumPlan 1-60% Plan-70% Plan-80% Plan-90%

Plan Overview In-Network Out-of- In-Network Out-of- In-Network Out-of- In-Network Out-of-Network Network Network Network

Medical Deductibles*****Individual/Family $3,250/6,500 $6,500/13,000 $3,000/6,000 $6,000/12,000 $1,000/2,000 $3,000/6,000 $0/$0 $2,000/4000

Prescription Drug Deductibles***** deductibles deductiblesIndividual/Family $400/800 are combined $150/300 are combined

Out-of-Pocket Maximum Individual/Family $6,250/12,500 $12,500/25,000 $6,250/12,500 $12,500/25,000 $3,000/6,000 $6,000/12,000 $2,000/4,000 $4,000/$8,000

Physician Offi ce VisitPreventive Care $0 50% co-ins. $0 40% co-ins. $0 30% co-ins. $0 20% co-ins.

Primary Care $30 copay** 50% co-ins.*** $30 copay 40% co-ins.*** $20 copay 30% co-ins.*** $10 copay 20% co-ins.***Specialist 40% co-ins.** 50% co-ins.*** $45 copay 40% co-ins.*** $45 copay 30% co-ins.*** $30 copay 20% co-ins.***

Emergency/Urgent CareUrgent Care Center or Facility 40% co-ins.** 50% co-ins.*** $75 copay 40% co-ins.*** $75 copay 30% co-ins.*** $50 copay 20% co-ins.***

Emergency Room 40% co-ins.** 40% co-ins.** $150 copay $150 copay $150 copay $150 copay $100 copay $100 copayAmbulance $0** $0** $0 $0 $0 $0 $0 $0

Hospital ServicesInpatient 40% co-ins.** 50% co-ins.*** $500/day 40% co-ins.*** $500/day 30% co-ins.*** $250/day 20% co-ins.***

$2,000/adm.** $1,000/adm.** $500/adm.Outpatient 40% co-ins.** 50% co-ins.*** $500 copay** 40% co-ins.*** $500 copay** 30% co-ins.*** $250 copay 20% co-ins.***

Mental Health, Substance Abuse & Behavioral Health Care Covered same as any other il lness in all the plans.

Hospice CareHospice Services $0** 50% co-ins.*** $0 40% co-ins.*** $0 30% co-ins.*** $0 20% co-ins.***

Outpatient ServicesHome Health Care 25% co-ins. 25% co-ins. 25% co-ins. 25% co-ins. 20% co-ins.

100 visits per calenday year maximum $50 deductible $50 deductible $0 $50 deductible $0 $50 deductible $0 $50 deductibleAdvanced Radiology 40% co-ins.** 50% co-ins.*** $75 copay**** 40% co-ins.*** $75 copay**** 30% co-ins.*** $75 copay**** 20% co-ins.***

Non-Advanced Radiology 40% co-ins.** 50% co-ins.*** $45 copay 40% co-ins.*** $45 copay 30% co-ins.*** $30 copay 20% co-ins.***Laboratory Services 40% co-ins.** 50% co-ins.*** $30 copay 40% co-ins.*** $20 copay 30% co-ins.*** $10 copay 20% co-ins.***

Rehabilitative Therapy 40% co-ins.** 50% co-ins.*** $30 copay 40% co-ins.*** $20 copay 30% co-ins.*** $10 copay 20% co-ins.***Chiropractic Care 40% co-ins.** 50% co-ins.*** $45 copay 40% co-ins.*** $45 copay 30% co-ins.*** $30 copay 20% co-ins.***

Prescription DrugsGeneric/Preferred/Non-Preferred $10**/40%**/40%** 50% co-ins.*** $10/$25*/$40*40% co-ins.*** $10/$25*/$40*30% co-ins.*** $5/$15/$30 20% co-ins.***

* After in-network prescription drug deductible is met. ** After in-network medical deductible is met. ***After out-of-network deductible is met. **** $75 copay per service up to a combined calendar year max. of $375 for MRI and CT scans: $400 for PET scans. ***** Copays are not applied to deductible.

This Standard Design sample is representative and is not to be a legal contract. Please see the actual plan documents for a full list of benefit coverage.

Plan Designs Standard Bronze Standard Silver Standard Gold Standard PlatinumPlan 1-60% Plan-70% Plan-80% Plan-90%

Plan Overview In-Network Out-of- In-Network Out-of- In-Network Out-of- In-Network Out-of-Network Network Network Network

Pediatric Dental CareDiagnostic & Preventive $0 50% co-ins.*** $0 50% co-ins.*** $0 50% co-ins.*** $0 50% co-ins.***

Basic Restorative 40% co-ins.** 50% co-ins.*** 40% co-ins. 50% co-ins.*** 20% co-ins. 50% co-ins.*** 20% co-ins. 50% co-ins.***Major Restorative 50% co-ins.** 50% co-ins.*** 50% co-ins. 50% co-ins.*** 40% co-ins. 50% co-ins.*** 40% co-ins. 50% co-ins.***

Orthodontia 50% co-ins.** 50% co-ins.*** 50% co-ins. 50% co-ins.*** 50% co-ins. 50% co-ins.*** 50% co-ins. 50% co-ins.***Pediatric Vision Care

Routine Eye Exam $30 copay 50% co-ins.*** $30 copay 40% co-ins. $20 copay 30% co-ins. $10 copay 20% co-ins.Pediatric Prescription Eye Glasses In-Network for All Plans Out-of-Network for All Plansone pai r of frames & lens es lenses: $0 lenses: $0 per ca lendar year collection frames: $0 frames: $0 up to a $30 allowance; any amount

non-collection frames: $0 up tp $150 al lowance; over the allowance is payable by the menberany amount over the $150 al lowance is payableby the member minus a 20% discount

** After in-network medical deductible is met. ***After out-of-network deductible is met.

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Questions

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Contact Information

Phil BoyleBusiness to Business Outreach Manager

860-757-5329EMAIL: Phil.boyle@ct.gov

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