Transcript Making the ACA Work for Independent Agents

The ACA Homestretch
This presentation has been designed to assist your ACA marketing
efforts, increase your sales, and simplify your administration.
February 21, 2014
Homestretch format:
• We encourage questions.
• To ask, type your question in the GoToMeeting “Questions” area located in
the toolbar on your right side of the screen
• The Moderator will answer the questions verbally at the end of the
presentation
• As a follow up to this webinar, you will receive a copy of the Q&A
session
• This webinar is being recorded and will be posted at
www.TheBrokerageInc.com approximately one hour after completion
A few of the many things we will touch on:
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Subsidies
HealthCare.gov
Confusing income tax issues
Household income - what does this mean?
9.5% Affordability Test
MEC - Minimum Essential Coverage - what is this?
EHB - Essential Health Benefits - how is this different than MEC?
QHP - Qualified Health Plan = EHB
SHOP Exchange
Pay or Play in 2015
Penalties for not owning a QHP and for Employers (50FTEs+) not offering MEC
Questions from the week of 2-17-14
• Small employer, less than 10 employees. None make over
$35000. Am looking at a plan that with employer paying 50% of
employee premium puts employee only coverage under the 9.5% max
but not if they have dependents. Adding dependent coverage puts
them over the 9.5% max. Question: does the 9.5% affordability max
apply to only the employee’s premium or the entire family premium
the employee pays?
Questions from the week of 2-17-14
What happens to insureds that are also receiving a cost sharing
allowance if their income exceeds the amount they estimated, and it
puts them back to a higher deductible and out of pocket limit?
Does the IRS collect the additional deductible amount if they bought a
$0 or $500 deductible plan with the cost-sharing, and it is a silver plan
that normally would have a $3,000 or $6,000 deductible and they
became ill and used it?
Questions from the week of 2-17-14
Do you have a chart showing the income for Texas allowed for the
various family size? (See next slide)
“Also please explain why some people don't get a subsidy even when they are below
the income thresholds. I have worked with some, for instance, my daughter. She
makes $32,000, family size 1, 76712 zip code, but she receives no tax credit because
of where we live…”
The chart says someone up to $45,960 with family of 1 should be eligible
so there must be other factors?? Does her age factor in, she is 28.
2014 Federal Poverty Chart
Here it is:
Questions from the week of 2-17-14
I understand most of healthcare reform. I have an owner of multiple
stores—Client owns 40 stores with different corporations. He is at least
a 2% owner in each of the stores. There is an average of 6 employees
per stores. In the past, he could write individual groups on
each. Question—Under healthcare reform, owner now has to count all
stores together. Am I correct?
Questions from the week of 2-17-14
If an employee has the ability to get insurance through an employer
(less than 10 employees) but they opt out and go to the exchange, is an
employer of this size fined?
If an employee in a group of this size has premiums in excess of 9.5% of
wages, what happens? Is the employer fined? If there is only one
employee in the group that exceeds the 9.5% threshold, can the
employer just pay more for that one employee and not for all?
ACA Observations:
• Keep in mind, implementing the ACA will continue for several more
years
• The law has gradually been implemented since March 2010
• The most significant deadlines are between January-April 1, 2014
• The ACA will not be repealed under Obama’s administration
• Lawmakers have filed bipartisan bills in December 2013 that, among
other things may:
• eliminate the penalty for not having a QHP in 2014
• extend the open-enrollment period beyond March 31, 2014
• provide some relief to consumers who have experienced policy
cancellations in the past three years
12/20/13 - individual mandate no longer applies
to people whose plans were canceled
Health insurance plans that were canceled in 2013 will "temporarily"
be exempted from the law's individual mandate
(HHS Secretary Kathleen Sebelius just delayed the individual mandate for
people whose plans have been canceled. )
The individual mandate includes a "hardship exemption."
People who qualify can either ignore the individual mandate altogether or
purchase a cheap, bare-bones catastrophic insurance plan that's typically only
available to people under 30
Texas Health Risk Pool
• Terminates at the end of March 2013
• Encouraging the policyholders to try to move to the HIMs ASAP
• Sending mailers urging them to use an agent
• Pool premium rates are increasing during this extension period
• At current rates many Pool enrollees will do better with a new QHP in
the exchanges
• Subsidies may offset the premium
• Any deductibles and other out-of-pockets incurred in 4Q 2013 during
the Pool extension period won’t credit to their new plan’s 2014 outof-pocket cap
Important Dates!
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Jan 16 – Feb 15: March 1 Effective dates
Feb 16 – Mar 15: April 1 Effective dates
Mar 16 – Mar 31: May 1 Effective dates
OEP 2015 is Nov 15, 2014 – Jan 15, 2015
Qualifying Events
• Similar to a Special Election Period in Medicare
• Examples of a QE:
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Loss of coverage
Loss of group coverage
Moving
Qualifying for subsidies
Losing subsidies
Gained a dependent due to marriage, birth or adoption
Get a Join.me account to conduct your online Express Link business
Here is a tip or two…
• Know how to calculate subsidies
• Know how to complete a HIM subsidy application
• No health questions
• Instead, Personal Identifiable Information (PII) questions
• Know how to calculate Health Insurance Tax Credits for groups of 2-25
• Use HITCs to prospect small groups of 2-25 lives
According to a recent analysis by Kaiser
Family Foundation (KFF):
• An estimated 17 million Americans who are now uninsured or
who buy insurance on their own will be eligible for premium tax
subsidies in 2014.
• Additionally, 29 million people nationally may look to the Marketplaces
to purchase health insurance coverage.
Number of tax Subsidy Eligible Residents
Potential Market Size
National
17,187,000
28,605,000
Texas
2,049,000
3,143,000
The honey hole…
• There are about 6.2M uninsured Texans
• About 2.2M are <138% FPL
• Let the Navigators enroll this population!
• That leaves 4,000,000 uninsured Texans
• Assume 1 out of 4 enroll
• There are about 13,000 BCBSTX appointed agents
• Maybe half of them are active – assume 6,500 write a case
• 1,000,000 divided by 6,500 is 154 apps per agent
• At $500 per app, that could be around $77,000 for
the next three years for each broker!
Download in the HCR section at www.TheBrokerageInc.com
PII – guard this private info with care
Calculating subsidies is very easy!
Use the Kaiser Family Foundation subsidy calculator
Instant results
Family of 4,
$60,000
expected
income in 2014,
Subsidies cover
41% of annual
premium
Open the “Notes” when you scroll down this page
Scroll down further for important FAQs
How would you handle this situation?
• Salon Manicurist that makes $7.25 per hour, plus tips
• Gets paid $217.50 per week (7.25 = x 30 hours)
• Gets paid for 52 weeks ($11,310 per year)
• Only claims $11,310
• Does not report cash tips
• $11,400 is the magic number for one person
• $94,200 is the magic number for a family of four
• Is this person eligible for Medicaid?
Answer – no Medicaid. Why?
• Because Texas did not expand our Medicaid via the ACA, the
Manicurist is not eligible for Medicaid
• So what can you do to help?
• Send her to a local clinic to free provide care
• Encourage the person to report more income (cash tips that were not
reported) and get the income to at least $11,400
Kaiser Family Foundation Subsidy Calculator
$11,310 in 2014
estimated income
is not going to
generate any
subsidies.
Raise the estimated income to above $11,400
Adding an additional
$190 of 2014
estimated income now
generates a premium
subsidy of $2,557
resulting in a $19.17
monthly premium
($230 annually)
Divorced Single Female with one child
$35,000
income in
2014, 226%
FPL gets 46%
of their
premiums
subsidized
Raise the income to $45,000
Only 12% of
the premium
is subsidized
Couple, considering retiring, ages 63 and 60 forecasting $40K in 2014 MAGI
258% FPL,
77% of their
premiums
would be
subsidized $11,053
subsidy
Raise the income to $50,000
Subsidy drops
to $9,614, or
$1,439 less or
$120 more per
month to pay
in premium.
Raise the income to $55,000…
Subsidy went
from $9,614
to $9,139, or
$475 less
What about this?
• Husband, wife and one dependent child
• Husband does not pay taxes
• Mom files her return and claims a child as a dependent
How do you calculate household income, with or without the
husbands income?
Tax sniglets
• Mom and Dad live in one house.
• Dependent child, age 23, now on her own, but has no income to
show yet. She works part time, and files her own income tax.
• Is she part of the household income calculations?
Remember this: the subsidies are based on estimated 2014 income.
<250% Federal Poverty Level =
CSR or Cost Sharing Reductions
• Similar to the Medicare Savings Plan (Low Income Subsidy), a person
at or below the 250% FPL is eligible for cost sharing on the Silver Plan
• Think of how the “low income subsidies” work within the “Medicare
Savings Program”
• How might the CSRs influence your recommendations?
• Would a supplemental plan still make sense?
• A reduced supplemental benefit plan may be a better fit for a budget
Regarding the 9.5% affordability test, does this
include the dependents and the employee’s cost?
• Employer coverage is considered affordable* if employee’s share of the annual
premium for self-only coverage is no greater than 9.5% of annual household
income
* as it relates to the Advanced Premium Tax Credit (APTC)
• Starting in 2014, individuals and their dependents offered employer-sponsored
coverage that’s affordable and provides minimum value won’t be eligible for a
premium tax credit
• How will this impact the dependents?
Don’t forget the dependents!
• If the employee is offered affordable coverage, the dependents lose
their subsidies
• Unintended consequence!
• Solutions could include:
• Give the employees a raise and let them buy health insurance via the
exchanges
• Drop the group health plan and establish a defined contribution strategy
• Requesting an employee only quote, and make the dependents not eligible
for coverage
To market plans with subsidies in the HIMs
Four step process:
1. Register at the CMS Enterprise Portal (Part 1)
2. Complete your certification at the HIM website
3. Register to enroll people in the HIMs (Part 2)
4. Complete the BCBSTX required certification
BCBSTX Broker Commissions:
Commissions
• 6% - Years 1-3
• 4% - Years 4+
• Based on full premium, not subsidized premiums
• $25 per app bonus for 1-1-14 effective dates
• Snapshot Bonus
Get paid! Complete this form on all cases!
Make sure you get paid!
• Use the BCBSTX Producer of Record Transfer Form
• Send this form with your applications to The Brokerage
• Suggestion: take “screen shots” of your agent info from within your
Express Link
• Be ready to audit your first commission statement!
How do I make sure I get credit for my
BCBSTX sales?
• Option 1
• Use your Express Link and apply for the subsides via leaving your Express Link,
being redirected to the HealthCare.gov website, applying for the subsidies,
and being redirected to your Express Link.
WARNING! In February, you will need to scrub your first
commission statement very closely to identify any missing
commissions, and prepare to prove you are the AOR from
your paper apps and screen shots.
How do I make sure I get credit for my
BCBSTX sales?
• Option 2 – BCBSTX Express Link
• Take the app “off-exchange”, forget the subsidies, and submit the
app. When it is time settle up with Uncle Sam by April 15, 2015,
apply the Premium Tax CREDIT
• Example: Premium is $600, client eligible for $200 in monthly subsidies. Client pays the
total of $7200 annual premium and collects a tax refund of $2400 in 2015
How do I make sure I get credit for my
BCBSTX sales?
• Option 3 – Express Link
• Use the paper HIM subsidy application and the BCBSTX paper health
insurance application
• Use the subsidy application to set up the subsidy (mail to the London, KY address)
• Submit the health insurance app electronically via Express Link
• At the part where you enter your agent info, take a screen shot and print this for future
reference
Find valuable tools in our Individual Health section
at www.TheBrokerageInc.com
Locate helpful resources online!
Get started!
The message is simple:
• As of January 1, 2014 you are required by federal law to own a qualified
health insurance plan (QHP).
• If you cannot afford a QHP, you will be subsidized.
• If you choose not to own a QHP, you will be penalized.
• If you need help, I can help you.
Check for updates at Healthcare.gov
ACA “MOOP” (Max Out of Pocket)
• $6,350 for an individual
• $12,700 for a family
• Same as the MOOP of an HDHP (high deductible health plan)
• Bronze or Silver plans have the same max out of pocket
• If you only make $50K per year, how can you pay this MOOP?
• Sales Tip: add a supplemental health plan!
Subsidies are based on the 70% Actuarial
Value Plan or “The Silver Plan”
• 70% AV Plan Premium
• Minus the subsidies
• Net premium cost to family
$8,362
- $4,996
= $3,365 per year / 12 = $280.42
Total Silver family Premium is $280 per month
60% AV Plan or “The Bronze Plan”
• 60% AV plan premium
• Minus the subsidies
• Net premium cost to family
$5,718
- $4,996
= $722 per year / 12 = $60.17
Total Bronze monthly premium is $60
Sales Idea: “The Combo Plan”
“Bronze Plan” and “Active Care”
• Bronze Premium
$60
• Active Care Premium
$153
• Total Family Premium
$213 per month
The “Combo Plan” is $67 less per month than The Silver Plan at $280 per month.
The supplemental health plan helps offset the $12,700 MOOP.
What is Active Care?
• New supplemental health product
• combines Critical Illness, Cancer, Heart Attack, Stroke, ESRD, and Accident
benefits into one product
• Simplified underwriting
• May be list billed
• Agent commission is 50%
• Contact [email protected] for complete details
• Visit http://thebrokerageinc.com/insurance-products/critical-illness/
Let’s review these numbers again…
Plan Options
Total Premium
Your Commission
70% value (Silver)
$8362
6% = $502
60% value (Bronze)
$5,718
6% = $343
“Active Care”
$1,836
+ 50% = $918
= $1,261
6% commission is paid by BCBSTX for years 1-3, and 4% level after that.
Which plan is best suited for the family?
• The Silver Plan at $280 per month
• The Bronze Plan / Active Care plan at $213 per month
The Combo Plan saves the family $804 per year in total premium
The Combo Plan offers better protection to the family
The Combo Plan pays the agent more commission
“I need a copay, not a High Deductible Plan!”
We asked, you answered…Q&A
• Are People that have a temp SSN (for work purposes only) or EIN
number (for IRS taxes) eligible for ACA?
Think about a person being legally documented to be in the USA. If so,
they are eligible for an ACA plan and subsidies.
Q&A
• What would happen to someone who qualifies for a subsidy, gets hurt
or disabled and looses a job resulting in gross pay dropping below the
poverty level?
• What are the different levels of cost sharing?
How do you calculate full time equivalents?
8 hours per day x 5 days per week X 52 weeks = 2080 hours/year
Examples:
•1 person working full time = 1 FTE
•2 people each working 4 hours per day, 5 days per week = 1 FTE
FTEs does NOT mean number of employees.
How to calculate your FTEs:
Take the total number of labor hours for one year and divide by 2080. This will be the total of
your FTEs.
Example: 2013 total labor hours reported to payroll is 13,104. 13,104 ÷ 2080 = 6.3 FTEs.
Q&A
• Upgrade the current understanding of "Employer Requirements" for ACA.
"So what do I now have to do for my employees that is different than
yesterday". This would include distinctions between large employers, small
employers, tax credits for providing coverage, and clarification on the fact
that all private plans being offered will meet the min coverage standard.
• Have you had any conversations with self-funded cat plans? Should we
mention that or is that take us to a level we don't want to get into for
something like this?
• Is it worthwhile to discuss the SHOP and ensure these folks know there is
nothing different on SHOP that we, as brokers, can access directly from
carriers?
Q&A
• What is our liability as brokers if we direct someone to the federal
web site and they get hacked?
• President Obama wants to bring back the old plans for another three
years so insured’s can go back into their original benefits . How does
this play into the case where the insured’s have selected “new &
affordable plans”?
Q&A
• Question: Client: Female age 75 has Green Card Resides in Honduras
part time and the rest of the time lives with son in Plano. She never
worked in the US and thus would have to pay for Part A and possibly
Part B Medicare. I was asked if she could get a policy through the
Exchange instead of paying for Part A and B plus a Med supp or
Advantage Plan. She probably qualifies for Medicaid but doctor son
does not want to go through that. She is not enrolled in Medicare
right now. Can I get her a policy? I contacted healthcare.gov and they
said she could get a policy. Not sure if that is correct. Her son would
pay for it.
Request for us to cover:
• Using the BCBS system directly and through the ACA;
• Marketing Ideas, such as: ACA through Tax Preparation companies….
What’s in it for them?
Q&A Answer:
http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-Questions-and-Answers:-Determining-FTEs-and-AverageAnnual-Wages
• Request: Also need a reminder on how to calculate part time equivalents to determine if the employer is considered over 50 lives.
• A. Add up the total hours of service for which the employer pays wages to employees during the year (but
not more than 2,080 hours for any employee), and divide that amount by 2,080. If the result is not a whole
number, round to the next lowest whole number. (If the result is less than one, round up to one FTE.) In
some circumstances, an employer with 25 or more employees may qualify for the credit if some of its
employees work less than full-time. For example, an employer with 48 employees that are each half-time
has 24 FTEs and, therefore may qualify for the credit. See the “Who is an employee for purposes of
determining FTEs and average annual wages?” and the “What are the permissible ways to count hours of
service?” questions on this page for information on how to compute an employee’s hours of service and
determining which employees are counted.
• Example: For the 2014 taxable year, an employer pays five employees wages for 2,080 hours each, three
employees wages for 1,040 hours each, and one employee wages for 2,300 hours. The employer uses a
method that counts hours actually worked. The employer’s FTEs would be calculated as follows:
• 10,400 hours for the five employees paid for 2,080 hours (5 x 2,080)
3,120 hours for the three employees paid for 1,040 hours (3 x 1,040)
2,080 hours for the one employee paid for 2,300 hours (lesser of 2,300 and 2,080)
• The total hours counted is 15,600 hours. The employer has seven FTEs (15,600 divided by 2,080 = 7.5,
rounded to the next lowest whole number).
Q&A
• Would like to know if after 4/1/15 (as things are right now) will there
be any other plans other than the metal plans to offer to employers
either public or private.
Q&A
• What happens if the applicant's used the wrong income amount?
Q&A
• What happens if the applicant's used the wrong income amount?
• MAGI, exactly where does the applicant find the info for this?
• Is line 37 off the 1040 tax return the most accurate figure to use?
Great resources!
The Requirement to Buy Coverage Under the Affordable Care Act
http://kff.org/infographic/the-requirement-to-buy-coverage-under-the-affordable-care-act/
Minimum Essential Coverage (MEC) vs. Essential Health Benefits (EHBs)
http://news.leavitt.com/health-care-reform/understanding-difference-minimum-essentialcoverage-essential-health-benefits-minimum-value-actuarial-value/
http://rss.ubabenefits.com/tabid/2835/Default.aspx?art=v8dHoutqon8%3D&mfid=XecEv5Wrckw%3
D
http://www.understandinghealthreform.com/large-employer/minimum-essential-coverage/
Get certified with The Blues
www.bcbstx.com/producer
This Power Point is available for download in our HCR
section at www.TheBrokerageInc.com
Your time is now!
• Get appointed with BCBSTX through The Brokerage
• Get certified
• For assistance, call The Brokerage
• 469-635-6000 or 800-442-4915
• Direct lines:
• Belynda DiCiaccio 469-635-6715
• Cristin Hopkin-Bishop 469-635-6707
• Dana Ragsdale 469-635-6749
Click here to meet our staff online
Thank you for your
participation!
Who are these 50,000,000 uninsured?
How do you get quotes? How do you sign them up?
Individuals Eligible for a Premium Tax Credit
(by employment status)
Individuals Eligible for a Premium Tax Credit (by age)
The “young and invincible”
• 34 Federally & State Partnership Marketplaces finds that out of 2.9 million
single young adults ages 18 to 34 who may be eligible for coverage in the
Marketplace
• 1.3 million (46%) could purchase a bronze plan for $50 per month or less
after tax credits.
• 1.9 million young adults (66%) of the potentially Marketplace-eligible
uninsured ages 18 to 34 may be able to pay $100 or less for coverage in 2014.
Source: U.S. Department of Health and Human Services
Valuable ACA Resources
Visit our Health Care Reform section at www.TheBrokerageInc.com
“Perplexity is the beginning of knowledge” Khalil Gibran
Resources at www.TheBrokerageInc.com
Scroll down to “Health Care Reform”, where ACA related
resources may be found.
HCR Resources, recorded webinars,
presentations for download
Use www.CMS.gov for YouTube video learning
Stay current via www.REGTAP.com
Participate in various webinar trainings