Transcript EB 2020 - Arkansas Business Events

Health Care Reform
Taking Action in 2014 and
Beyond
True or False
• What I tell you today may not be true tomorrow,
or next week or next year
• Health Reform is more complicated than shipping
through the U.S. Postal Service
• 40 will be the last time Republicans vote to repeal
Health Reform
• If you’re over 40 and eat and drink considerably
more than you exercise, you will gain weight
What are we dealing with?
• 4 in 10 Americans (42%) are unaware that ACA is still the law of the
land, including 12% that believe the law has been repealed by
Congress, 7% that believe is was overturned by the Supreme Court
and 23% that say they don’t know enough to speculate on the
current status of the law
• Close to have of the population (49%) say they don’t have enough
information about health care reform to understand how it will
impact their own family
• When it comes to where they are getting information about the
law, Americans most commonly cite friends and family (40%),
newspapers, radio or other online news sources (36%), and cable
news (30%). About 1 and 10 report getting information from a
health insurer, a doctor, an employer, or a non-profit organization
Delaying that “part” will cost the
American taxpayer
$12 billion
Roughly amounts to $160 per household
assuming ½ the population pays taxes
Source: Congressional Budget Office
What exactly is delayed?
• For large employers they will not have to consider
whether they employ 50 or more FTEs or equivalents
(part time) during the previous calendar year
• No longer have to count employees hours to determine
if they average 30 or more hours per week
• Don’t have to offer minimum essential coverage next
year or offer coverage to employees averaging 30 or
more hours per week
• Offer coverage that is of “minimum value” nor does it
have to be “affordable”
How could the delay affect you?
• If employers are not reporting, how will HHS know
whether coverage is “affordable”?
• If employers offer a substandard plan (less than 60%),
will an individual still be liable for a penalty for not
having health insurance?
• The exchanges can dispense benefits “based on an
applicant’s attestation” about employment insurance
and income without verification
• Does this create an unintended consequence of
migration from group coverage to the exchange?
What you do need to
worry about
Many Provisions Still in Play
• No Annual Limits on Essential Health Benefits
• No Pre-Existing Condition Exclusions for
Anyone!
• Maximum 90-day waiting periods on all plans
• Notice of Public Exchange
• New requirements for wellness programs
Many Provisions Still in Play
• The individual mandate
• Limits on cost-sharing (some of which is
delayed) and deductible limits for small
employers
• Rating restrictions for small employers
• Subsidies for low-income individuals for
Exchange coverage
Maximum 90 Day Waiting Period
Waiting periods for enrollment must shorten to 90 days.
Recent guidance allows 1st of the month IF enrollment occurs
by 91st day. This means 1st of the month after 60 days is okay
Small
Group
Fully
Insured
Yes
Large
Group
Fully
Insured
Yes
Applies to grandfathered plans
Self
Funded
Individual
Yes
Yes
Notice of Public Exchange
Employers must provide written notice to:
• Existing employees by October 1, 2013
• Annually (presumably March, but awaiting guidance)
• New employees upon date of hire
o Includes info about the local State Exchange, possible
subsidies, and ineligibility for employer contributions if
covered through Exchange
o Model notice available in English and Spanish (located on
DOL website)
o Same delivery rules as SPDs
Changes to Wellness Programs
• Maximum incentive increases from 20% to
30%
• Additional 20% (up to 50% total) if to prevent/
reduce tobacco use (apparently delayed on
exchange coverage in 2014)
• Additional administrative rules will apply –
particularly to outcomes based programs.
Consult you benefits or legal advisor
The Individual Mandate
Individuals must have insurance or pay a penalty
YEAR
PENALTY
2014
Greater of $95 per person (cap of $285 per
family) or 1% of household income
2015
Greater of $325 per person (cap of $975 per
family) or 2% of household income
Greater of $695 per person (cap of $2,085 per
family) or 2.5% of household income
2016
Family members under 18 receive 50% penalty reduction
Limits on Cost Sharing
Out-of-pocket limits must comply with OOP
limits for HSA plans. Copays for EHB services
must count toward the OOP max.
Small
Group
Fully
Insured
Yes
Large
Group
Fully
Insured
Yes
Not required for grandfathered plans
Self
Funded
Individual
Yes
Yes
Essential Health Benefits (EHB)
Metallic/ Actuarial Value
Essential Health Benefits must be offered by
individual policies and small group nongrandfathered insured plans at 4 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.
Essential Health Benefits (EHB)
Health Plans must provide Essential Health
Benefits for individual and small group
Small
Group
Fully
Insured
Large
Group
Fully
Insured
Self
Funded
Individual
Yes
No
No
Yes
Adjusted Community Rating
Rate factors are limited to geographic area, age (3:1 limit)
and tobacco use. Rates may not vary by gender, health
status, claims history, group size or industry
Small
Group
Fully
Insured
Large
Group
Fully
Insured
Self
Funded
Individual
Yes
No
No
Yes
Not required for grandfathered plans
Impact on Small Employers
Rating Factors TODAY Rating Factors 2014 Range of Potential
Rate Change
Health Status
Tobacco use
-25% to +25%
Age and gender
Age only (3:1 max
range for adults
-10% to +10%
Industry
Not applicable
-15% to +15%
Group size
Not applicable
-10% to +10%
Geography/ Region
Defined by State
-5% to +5%
Family composition
Family composition
0%
Subsidies for Low-Income Individuals
Income Level
Premium as a Percent of Income
Up to 133% FPL
2% of income
133 – 150% FPL
3 – 4 % of income
150 – 200% FPL
4 – 6.3% of income
200 – 250% FPL
6.3 – 8.05% of income
250 – 300% FPL
9.05 – 9.5% of income
300 – 400% FPL
9.5% of income
Things to Think About
… If you’re a Small Employer
• Are you really a large employer subject to the
mandate?
Measured over prior calendar year:
Employers with 50 FTEs on average
Measured by looking at entire controlled group/
affiliate service group
• A special transition rule allowing a shorter look-back
may be available for 2015 but we don’t know yet
Things to Think About
… If you’re a Small Employer
• Should you remain grandfathered with an
older employee demographic?
• Consider self-funding if you have a younger,
healthier demographic?
• Should you renew early (December) to avoid
Community Rating and “rate compression”?
Things to Think About
… If you’re a Small Employer
• Drop coverage and send your employees to
the exchange?
o How will you make employees “whole”?
o How will it impact your ability to attract/ retain?
• Offer coverage through the SHOP exchange?
o Only one option offered in 2014
Things to Think About
… If you’re a Large Employer
• Pay or Play is delayed but not dead. Still need
to determine “eligible” employee and offer
plans that meet minimum value/ affordability
requirement.
• Weigh your options for eliminating employersponsored health insurance and sending
employees to the Exchange.
Things to Think About
• If considering dropping coverage, these are
some things to consider:
– Based on contributions today, how will I make
employees “whole”? Current contributions are tax
deductible, compensation is not.
– How will this impact the employer – employee
relationship?
– How will this impact my ability to attract a quality
workforce?
Things to Think About
• Consider self-funding
– Review of premium increases by HHS doesn’t
apply to self-funded plans
– Greater flexibility in plan design
– Avoid 2.3% of premium Insurer Fee associated
with fully insured plans
– Avoid mandated services for fully insured plans,
estimated to increase premiums by as much as
15%
Things to Think About
• Self-funding
– More transparent. Self-funded plans allow
employers to determine what true costs of
coverage are.
– Obtaining better data, employers can address
high-cost services more directly and future
premium increases are tied specifically to the
employer population
Things to Think About
• Be aware of the new “aggregator rule”
– Office visit copays now apply to out-of-pocket
maximums
– For low deductible plans with low OOP max, adjust
those maximums now to account for the additional
exposure
• Auto enrollment for employers with 200+
employees
• Non-discrimination rules for fully-insured plans
(effective dates TBD)
Pay or Play Mandate
2015 Forecast for Employers
MOST Employers will avoid the
penalty and Exchanges
• Meet minimum plan design and
contribution requirements
• Keep EEs in employer risk pool and
out of Exchanges
•Avoid employer tax penalties
Variation #1: Enable Access to public
programs
• Set “affordable” EE premium levels
to allow lower wage EEs to qualify for
tax credits to purchase coverage
through the Exchange
Variation #2: Take proactive steps to
limit liabilities
•Limit scheduled hours for part-timers
•Adopt measurement periods for
variable hour EEs
•Restructure entities
The End
Questions??
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