Transcript The Affordable Care Act’s Impact on Insurance Regulation

Health Insurance 101:
ACA Overview, Update and
Q&A
South Carolina Health
Underwriters Association
March 25, 2014
9:00 a.m. – 10:00 a.m.
1
Today’s Focus
1. ACA Overview, Update and its Impact on South
Carolina’s Health Insurance Market
2.Frequently Asked Questions regarding the ACA
3.Q&A Session
Impact of the ACA on
the S.C. Health
Insurance Market
3
Key RegulatoryRoles and
Responsibilities
 South Carolina
• License insurance companies
• License insurance agents
• Review policy forms for health
insurance
• Review rates charged for health
insurance products
• Assist consumers with
questions or issues related to
health insurance
• Monitor the SC health
insurance market
• Federal Government
– Implement the ACA
– Establish and operate the
federally-facilitated exchanges
– Certify QHPs
– Create and oversee certification
of assisters
– Determine federal subsidies and
issue payments
– Enforce coverage mandates
– Regulate and oversee the
implementation of ACA’s
provisions for self-insured
plans
4
The Affordable Care Act’s Enactment
Made up of two laws:
1. The Patient Protection and Affordable Care Act
Public Law No. 111-148
Enacted March 23, 2010
As amended by:
2. The Health Care and Education Reconciliation Act
Public Law No. 111-152
Enacted March 30, 2010
5
Also known as…
Health Care Reform
PPACA
Obamacare
Health Care Law
6
Key Insurance Market Reforms
Immediate Market Reforms
Additional Market Reforms
Effective September 23, 2010*
Effective January 1, 2014*
•
Restricted Annual Dollar Limits
•
No Annual Dollar Limits
•
No Pre-existing Condition Exclusions for
Children (Up to Age 19)
•
No Pre-existing Condition Exclusions for All
•
Guaranteed Issue for All
•
Guaranteed Renewability
•
Coverage for Individuals Participating in
Approved Cancer Clinical Trials
•
Coverage of Essential Health Benefits
•
•
No Lifetime Limits
No Rescissions of Coverage/ Appeals Process
•
Extension of Dependent Coverage to Age 26
•
First Dollar Coverage of Preventive Services
•
Access to ER Services
*6 months following PPACA’s enactment date of March 23, 2010.
*Health Insurance Exchanges also go into effect at this time (more details on
Exchanges in later slides).
Note: Not all of these provisions apply to grandfathered health plans (more details on later slides).
Changes to Premium Rate Regulation
Medical Loss Ratios (MLRs)
•
2011 and thereafter
•
•
Individual & Small Group: 80%
Large Group: 85%
Small Group = 2-50 employees
Large Group = 51+ employees
Example:
An insurer offering individual insurance must spend 80¢ out of every $1 in premium revenues on claims/
health care quality improvements.
•
State Flexibility:
 Can Request Individual Market Waiver (Subject to HHS Approval)
 Can Require Higher Minimum MLRs
•
Rebates required if carriers fail to meet minimum MLR @ end of plan year.
Changes to Premium Rate Regulation
•
Premium Rate Review
Limits on Rate Variations
Effective 7/1/2011
Effective 2014
HHS Secretary to develop process for
annual review of “unreasonable”
premium increases in consultation
with states
•
 Plan/ Policy Type (Individual or Family)
 Rating Area (SC has 46 rating areas - one
per county)
 Age (Age Bands Permissible; 3:1 max ratio)
 Tobacco Use (1.5:1 max ratio)
 Applies to rate increases filed on/ after
effective date
 Rate filings with a 10% or more increase
will be subject to review
•
•
Carriers are required to submit to
state/ HHS Secretary justification for
unreasonable premium increase and
post it online
Rates for a particular plan/ policy
may only vary based on:
No longer permitted to rate based
upon other factors, including:
 Sex (male/ female)
 Health status
 Etc.
South Carolina has been deemed as an Effective Rate Review state by HHS.
Health Insurance Exchanges
• Two Exchanges:
 Health Insurance Marketplace (Individual Market)
 Small Business Health Options Program a/k/a SHOP (Small
Group Market)
• If a state does not establish an Exchange, the HHS
Secretary is required to do so in that state.
 South Carolina is one of 27 states that have Federallyfacilitated Exchanges (FFEs).
 7 states have established Partnership Exchanges.
 17 states (including D.C.) have established State-based
Exchanges.
Exchange Basics
• Must be operated by a governmental agency (state or
federal) or nonprofit entity.
• Can only offer qualified plans to individuals or employers.
(Exception: Exchange-certified Stand Alone Dental Plans)
• Must provide for enrollment periods (initial, annual,
special).
Exchange Plans
•
Qualified Health Plans (QHPs) Must:




•
Be offered by a carrier licensed and in good standing in the state
Provide Essential Benefits Package (as determined by HHS)*
Agree to offer at least one Silver and one Gold plan
Agree to charge same price on and off of Exchange for same plan
New Issuers/ Options:

CO-OP Plans




Originally intended to provide $6B in funding for establishment of at least one/ state, but reduced by
funding cuts to roughly $2B.
23 states, including South Carolina.
South Carolina’s CO-OP: Consumer’s Choice Health Plan
Multi-State Plans


Office of Personnel Management (OPM) responsible for contracting with carriers that write in multiple
states.
In 2014, two MSPP products – one Gold plan and one Silver plan – will be available in the individual
market FFE in South Carolina. These are underwritten by BlueCross BlueShield of South Carolina.
*State mandates apply if enacted before 12/31/2012. If after that date, state must assume cost of new benefit mandate(s).
Metal Levels
•
Plans are separated into categories, commonly referred to as the Plan
Metal Level, based on the percentage the plan pays of the average
overall cost of providing essential health benefits to members, aka
Actuarial Value (AV). The plan category you choose affects the total
amount you'll likely spend for essential health benefits during the
year.
•
The percentages the plans will spend, on average, are:
Plan Metal Level
Catastrophic
Bronze
Silver
Gold
Platinum
Actuarial
Value
n/a
60%
70%
80%
90%
Metal Levels (con’t)
• Example: A Silver Plan with an actuarial value of 70%
means that, on average, the consumer would pay 30% of
the costs of all covered benefits through out of pocket cost
sharing.
• The AV is an average of expected costs across a standard
population, so any individual could be responsible for a
higher or lower percentage of the total costs of covered
services for the year, depending on their actual health care
needs and the terms of their insurance policy.
• Off FFE plans will also be assigned a metal level.
Catastrophic Plans
•
•
•
•
•
Must meet all of the requirements applicable to other Qualified
Health Plans (QHPs), but coverage will be slightly less generous than
the Bronze level plans.
These plans are not required to cover benefits before the plan's
deductible is met with one exception: they must cover three primary
care visits per year regardless of whether or not the plan's deductible
has been met.
The monthly premium is generally lower than for other QHPs, but
the out-of-pocket costs for deductibles, copayments, and coinsurance
are generally higher.
Additionally, the federal government has limited enrollment in
catastrophic plans. To qualify for a catastrophic plan, you must be
under 30 years old OR get a "hardship exemption" from the Health
Insurance Marketplace.
Finally, federal subsidies (e.g., premium tax credits and cost-sharing
reductions) aren't available for catastrophic plans.
Minimum Exchange Functions
Health Plans
• Implement procedures for certification, recertification, and
decertification of health plans.
• Assign a rating to each health plan.
Consumer Information
• Operate a toll-free hotline.
• Maintain Internet website with standardized information.
• Utilize standardized format for presenting options.
• Make available a calculator to determine the actual cost of
coverage after subsidies.
• Establish a Navigator program.
Minimum Exchange Functions (con’t)
Eligibility Determinations
• Inform individuals of eligibility for Medicaid, CHIP, or other
applicable state or local public programs (“No Wrong Door”)
• Certify exemptions from individual mandate.
• Grant a certification attesting that the individual is not subject
to the coverage mandate because:


•
•
there is no affordable option available; or
the individual is exempt from the mandate.
Transfer to the Treasury information on exempt individuals and
employees eligible for tax credit.
Provide to each employer the names of employees eligible for
tax credit.
Certification of QHPs
• Qualified health plans must meet minimum requirements in
order to be certified and maintain certification.
• ACA requires this criteria include requirements relating to:
 Marketing
 Network Adequacy
o Availability of in-network and out-of-network providers
o Access to essential community providers for low-income/ medicallyunderserved
 Clinical Quality Accreditation by HHS-recognized organization
 Quality Improvement Strategies
 Uniform Enrollment Form
 Standardized Format for Presenting Plan Options
Exchange Subsidies
Individual Subsidies
•
•
Eligibility is based on Household Income
as a % of Federal Poverty Level (FPL)
Small Business Tax Credits
•
2010 - 2013
 Up to 35% of employer contribution for
employees’ health insurance
Premium Subsidies
 Tax credit that is taken in advance, so that the
government pays a portion of your monthly
premium
 Must select a Metal Level Plan (not available
for Catastrophic Plans)
 100% - 400% FPL
 $11,490 - $45960 for individuals
 $23,550 - $94,200 for a family of 4
• Reduced Cost Sharing
 Lowers the out of pocket costs (e.g.,
deductibles, coinsurance, and co-pays) that
insureds must pay
 Must select a Silver Plan
 100% - 250% FPL
 Max of $28,725 for individuals or
 $56,875 for a family of 4
•
2014 and thereafter
 Up to 50% of employer contribution
 Must be Exchange plan
 Limited to 2 years
•
Eligible Businesses
 25 or fewer employees
 Average wages of $50,000 or less
 Employer contributes 50%+ of premium
Off the Exchange vs. On the Exchange
• Federal subsidies for individuals and small
businesses are only accessible if purchasing a
QHP through the Exchanges
• More carriers and plan types will be available
outside of the Exchanges in 2014
20
Individual Market Options
Individuals, Families, and SelfEmployed
21
On the Exchange
Individual Market Coverage (Individuals, Families, and Self-Employed)
Qualified Health Plans Certified for Sale in the Health Insurance Marketplace ¹
Metal Level*
Company Name
Catastrophic Bronze Silver
Gold
Platinum Totals
BlueChoice Health Plan
Blue Cross and Blue Shield of
South Carolina
Consumers' Choice Health
Insurance Company
Coventry Health Care of the
Carolinas, Inc.
Individual Market Totals
1
3
5
1
-
10
1
2
4
2
-
9
1
2
3
2
-
8
5
10
5
5
-
25
8
17
17
10
0
52
22
Off the Exchange
Individual Market Coverage (Individuals, Families, and Self-Employed)
Health Insurance Plans Approved for Sale in the Individual Market
Metal Level*
Company Name
Catastrophic Bronze
Silver
Gold
Platinum
Totals
BlueChoice Health Plan
1
3
5
1
-
10
Blue Cross and Blue Shield of
South Carolina
1
2
3
1
-
7
Celtic Insurance Company
-
1
-
-
-
1
-
1
1
1
-
3
-
4
9
2
-
15
5
10
5
5
-
25
2
14
8
4
4
32
1
2
4
2
-
9
10
37
35
16
4
102
Cigna Health and Life
Insurance Company
Consumers' Choice Health
Insurance Company
Coventry Health Care of the
Carolinas, Inc.
Time Insurance Company
UnitedHealthcare Life
Insurance Company
Individual Market Totals
23
Employer Impact
• ACA’s impact will vary depending upon:
– The size of the employer
– Whether the employer currently offers health
insurance
– Current state insurance laws and regulations
– Whether the plan is grandfathered or
“grandmothered” or ACA compliant.
24
Provisions Applicable to All
Employers
• All health plans must comply with the following
including grandfathered plans:
–
–
–
–
–
–
–
–
No lifetime caps on coverage
No annual limits on essential health benefits
Expanded dependent coverage to age 26
Restrictions on the ability to rescind a policy
Limits on FSA contributions
Medical Loss ratio rebates
No pre-existing condition exclusions
Summary of Benefits and Coverage
25
ACA’s Individual Impact
• Depends upon:
– Whether the individual has minimum essential coverage
through another plan including
•
•
•
•
TriCare
Medicare
Qualifying Employer Sponsored Insurance Coverage
Qualifying Individual Health Insurance Coverage
– the size of the employer
• Portions of the ACA has been delayed for large and mid-size
employers
• Whether existing coverage is grandfathered, grandmothered or
other
– Age
– Uninsured
• All Americans must have some form of health insurance by March
31, 2014 or face a penalty.
26
On the Exchange-2014
Small Group Market Coverage (Small Businesses with 2-50 Employees)
Qualified Health Plans Certified for Sale in the SHOP 2
Metal Level*
Company Name
Catastrophic Bronze Silver Gold Platinum
BlueChoice Health Plan
Blue Cross and Blue Shield of
South Carolina
Consumers' Choice Health
Insurance Company
Small Group Market Totals
Totals
-
-
1
1
-
2
-
-
1
1
-
2
-
1
3
3
1
8
0
1
5
5
1
12
27
Small Group Market Coverage (Small Businesses with 2-50 Employees)
E
x
c
O t
h
f h
a
f e
n
g
e
Health Insurance Plans Approved for Sale in the Small Group Market
Metal Level*
Company Name
Catastrophic Bronze
Silver
Gold
Platinum
Totals
Aetna Life Insurance
Company
-
4
6
4
-
14
BlueChoice Health Plan
-
3
4
1
-
8
-
2
8
1
-
11
-
4
6
6
-
16
-
2
8
6
2
18
-
12
48
36
12
108
-
4
14
6
12
36
-
-
5
1
-
6
-
15
27
24
15
81
-
11
11
11
-
33
-
15
27
24
15
81
-
10
22
31
14
77
-
22
32
40
14
108
0
104
218
191
84
597
Blue Cross and Blue Shield of
South Carolina
Consumers' Choice Health
Insurance Company
Coventry Health and Life
Insurance Company
Coventry Health Care of the
Carolinas, Inc.
Federated Mutual Insurance
Company
Humana Insurance
Company
John Alden Life Insurance
Company
Nippon Life Insurance
Company of America
Time Insurance Company
UnitedHealthcare Insurance
Company
UnitedHealthcare Insurance
Company of the River Valley
Small Group Market Totals
Note: the
companies/ plans
highlighted in
grey and
italicized have
not yet been
approved.
28
“Grandfathered” Plans
• A grandfathered health plan is a plan that has existed continuously since
before March 23, 2010, without significant changes in the plan.
Grandfathered plans aren’t subject to many of the requirements of the ACA,
such as the requirement that plans cover essential health benefits.
• Grandfathered plans that make certain changes, such as major increases in
their cost-sharing (e.g., coinsurance, deductibles, copayments), or
eliminating benefits, may lose grandfathered status. Employer-sponsored
plans that significantly raise the employee share of the premium also could
lose grandfathered status.
• A plan must indicate in the plan materials if it is a grandfathered plan. Also,
consumers can check with their insurance company or employer.
• Note: the State Health Plan is a grandfathered plan.
29
“Grandmothered” Plans
•
•
On November 14, 2013, President Obama announced that States could decide
whether to allow small group and individual health insurance policies existing on
October 1, 2013 to be renewed for a policy year starting between January 1, 2014
and October 1, 2014. To give consumers the most options, some states allowed
health insurers to offer the renewal option. South Carolina was one of them.
Essentially, for consumers these are the choices in the market for SC consumers:
– “Grandfathered 2010” health plans. The federal law specifies conditions for
grandfathered plans that existed in March 2010. Grandfathered health plans cannot
be sold on the online marketplace or the federally-facilitated exchange
(FFE). Many people will not have access to this option because their policies
changed after March 2010.
– “Transitional renewal plans” also called “Grandmothered” health plans. These
plans must have been in existence on October 1, 2013 and renewed prior to October
1, 2014. They include some but not all of the ACA features. Transitional or
“Grandmothered” health plans cannot be sold on the online marketplace or the
FFE. These plans will be subject to updated premium rates. You may only apply
for a renewal policy, not a newly issued policy. On March 5, 2014, the federal
government announced that it was extending the transitional renewal policies.
– “Fully compliant new 2014 ACA” plans. Non-Grandmothered or
nongrandfathered plans must include all ACA features, including the 10 Essential
Health Benefits. Fully compliant ACA plans will be sold on and off the FFE.
30
Implementation of Initial Transitional Policy (November
2013)
Under this federal announcement, if certain specified conditions are met, health
insurance coverage in the individual or small group market that is renewed for a
policy year starting between January 1, 2014 and October 1, 2014 will not be
considered to be out of compliance with the following federal market reforms which
are included in the Public Health Service Act and scheduled to take effect for plan or
policy years starting on or after January1, 2014:
• PHSA §2701 (relating to fair health insurance premiums);
• PHSA §2702 (relating to guaranteed availability of coverage);
– PHSA §2703 (relating to guaranteed renewability of coverage);
• PHSA §2704 (relating to the prohibition of pre-existing condition exclusions or other
discrimination based on health status) with respect to adults, except with respect to group
coverage;
• PHSA §2705 (relating to prohibitions on discrimination against individual participants and
beneficiaries based on health status), except with respect to group coverage; • PHSA §2706
(relating to non-discrimination in health care);
• PHSA §2707 (relating to comprehensive health insurance coverage); and
• PHSA §2709, as codified at 42 U.S.C. §300gg-8(relating to coverage for individuals
participating in approved clinical trials).
•
•
A number of states opted to implement the November 5 transitional policy.
South Carolina was one of those states. Others did not.
Bulletin 2013-12 sets forth the South Carolina’s guidance on this issue.
31
ACA Market Impact?
• No one knows really. Results vary among the states.
For example, California and New York are viewed or
“appear” to be more competitive post-ACA.
• In contrast, CT and WA markets are viewed as less
competitive. In CT, it is reported that two of the largest
carriers are not participating in the state’s exchange.
• The Kaiser Family Foundation has published a report
on this issue. The report examines the markets in seven
states. South Carolina is not one of the them.
• Has competition increased in SC? Hard to say… Let’s
look at the numbers.
32
SC Enrollment Numbers as of
March 15, 2014
• Number of SC citizens that have secured coverage through the FFE:
43,229. These individual have selected coverage and PAID their
premium. This number may differ from other numbers you may see
that report the number that have selected coverage through the FFE.
– This number represents 64% of the individuals that have gotten through
the application, eligibility determination and plan selection process in
order to enroll
– Percentage of the 43,229 receiving a federal subsidy is: 88.69%
– Average age of the individual securing coverage through the FFE is
44.50
– Average age of the individuals who have secured coverage in the
market outside the FFE is 35.71
• The DOI will update these numbers after March 31st the last day of
open enrollment for 2014.
33
ACA Market Issues to Date
• Difficulty enrolling into the plans offered on the FFE. Some
complain that it takes too long and that the premium quoted by
healthcare.gov may not be the same as that quoted by the company.
Companies say that healthcare.gov is quoting the premium with the
subsidy and the applicant may not qualify for the subsidy.
• Concerns about the restricted networks
– Some plans offer exclusive provider networks
– Network adequacy is one of the issues that CMS will be looking into
for this next round of QHP applications
• Consumers are complaining that they are waiting to hear from the
companies. When they call the companies they are told to contact
healthcare.gov when the call healthcare.gov, they are told to call the
company.
• Some consumers have had coverage lapse due to the communication
issues between the company and healthcare.gov.
34
Frequently Asked
Questions
35
EXCHANGE BASICS
36
Who can purchase a plan through the FFEs?
• In South Carolina, any individual or family who wants to may buy coverage
through the Health Insurance Marketplace. The only people who can’t are
those who aren’t legally in the United States or who are incarcerated (other
than pending disposition of charges).
• Small employers (employers with fewer than 50 employees) may purchase
health insurance for their employees through the Small Business Health
Options Program (SHOP Exchange). Self-employed individuals and
businesses with only one employee may access coverage through the
individual market (Health Insurance Marketplace or outside of the FFE).
• Note: Just because you can purchase a plan through the FFEs does not mean
you will qualify for a subsidy.
37
When will consumers be able to enroll in plans through the Health
Insurance Marketplace?
The initial open enrollment period ends on March 31, 2014. Individuals who do
not have coverage as of that date may be subject to a tax penalty.
38
When will consumers be able to enroll in plans through the Health
Insurance Marketplace? (cont’d.)
• Consumers may also be eligible to enroll in coverage at times other than during
the open enrollment period.
 There are special enrollment periods for individuals or families if they experience a “triggering
event.”
 Some examples of triggering events include: (1) loss of minimum essential coverage; (2) gaining
or becoming a dependent; (3) newly gaining citizenship; and (4) being enrolled if a plan through
the exchange without tax credits and then becoming newly eligible for tax credits.
• In future years, open enrollment will be each year between October 15 and
December 7. During this time, consumers will be able to change plans, change
insurance companies or stay with the plan they have if it is still available. This
will not be the open enrollment period next year.
• Unlike the Health Insurance Marketplace (individual FFE), open enrollment for
the SHOP will be year-round for most small employers.
39
Proposed Open Enrollment Dates
for 2015
• Open Enrollment: November 15, 2014 through
January 15, 2015 are the proposed dates
• Insurers will have to submit their products to the
Department for review by May 26, 2014-June 27,
2014
– Insurers interested in being a QHP (i.e., selling products on
the exchange) must submit their application by that
deadline as well
– September 4 is the final QHP submission date
– September 20 is the data lock-down date
– Contract notifications are sent to issuers in October 201440
How can a consumer prepare for plan selection/
enrollment?
•
There are a number of steps consumers can take to prepare. Healthcare.gov has suggestions
for things consumers should be thinking about in preparation for enrolling in a plan.
•
Consumers who do not currently have health insurance coverage should find out if help
might be available now through existing programs or because of changes that are already in
effect from the ACA. For example, a parent’s plan may cover young adults under age 26.
Consumers can also contact an insurance agent or broker for help.
•
Consumers can also check with employers to find out whether they intend to offer health
insurance coverage in the future or whether the coverage they currently offer meets the
minimum level for complying with the law’s requirement to avoid paying a penalty.
Insurance companies must notify policyholders if their plan does not meet ACA
requirements (i.e., non-grandfathered health plans that will not be renewed on/after .
•
Finally, consumers can start gathering basic information about household income, such as
their 2012 tax return if they filed one, or other income information (necessary to determine
eligibility for federal subsidies).
41
SHOPPING FOR HEALTH
INSURANCE COVERAGE:
WHAT IS COVERED?
42
How do the metal levels help consumers compare plans?
• The tiers are a way to categorize plans based on “actuarial
value”. Plans within each tier (catastrophic, bronze, silver,
gold, and platinum) have similar actuarial value, even if they
cover different benefits or have different types of cost-sharing.
• While all metal level plans in a given tier must cover essential
health benefits, the details of their coverage (such as how
many physical therapy visits are covered or which prescription
drugs are covered) may be different.
• Not all plans in the same tier have the same benefits or cost
sharing requirements.
• Some plans may offer benefits in addition to the essential
health benefits.
• Plan types can also vary within a given tier and on v. off the
FFEs. Carriers writing in South Carolina have filed a variety
of plans, including PPOs, EPOs, POS, and HMOs.
43
What services/benefits must be covered by plans? What
are essential health benefits?
•
After January 1, 2014, almost all plans sold in the individual and small group
market, including those sold through the Health Insurance Marketplace and the
SHOP exchange, as well as plans sold in the market outside the exchange, must cover,
at a minimum, a comprehensive set of benefits known as essential health benefits.
These essential health benefits include the following:
–
–
–
–
–
–
–
–
–
–
•
Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance abuse disorder services, including behavioral health treatment
Prescription drugs
Rehabilitative and habilitative services and devices
Laboratory services
Preventive and wellness services, including chronic disease management
Pediatric services, including oral and vision care
Note: grandfathered plans (both individual and group) don’t have to include EHBs.
44
How can a consumer find out the details about what a
particular plan covers?
• All individual and small group plans (excluding grandfathered plans) with an
effective date on or after January 1, 2014 will cover essential health benefits.
• To learn if a specific benefit is covered, and at what level, check a plan’s
Summary of Benefits and Coverage (SBC). An SBC is a uniform document that
includes details about what a plan does and doesn’t cover. It also includes
information about what kinds of costs a consumer can expect to pay out-ofpocket, such as copayments, coinsurance, and deductibles. An SBC comes with
plans offered through the exchange and in the market outside the exchange. It
gives information in the same way for every plan to make it easier to compare
plans. The SBC forms are on the federal government’s website at
www.healthcare.gov, or from an agent or broker for plans offered in the market
outside the exchange.
• Consumers can read more about the Summary of Benefits and Coverage here:
http://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-andInformation/Summary-of-Benefits-and-Coverage-and-Uniform-Glossary.html
45
Can a person remove benefits from a plan? What if a
consumer does not need them all?
• No, benefits cannot be removed from a plan,
although a consumer may be able to add extra
coverage.
• This is true for grandfathered and non-grandfathered
plans.
• Even though a person may not need every benefit on
a plan, coverage is required for all of these benefits in
order to share risk across a broad pool of consumers
and make sure all benefits are available for everyone.
This also helps to protect people from risks they
cannot always foresee across their lifetimes.
46
Can a person’s health condition affect their
coverage?
• Generally, the answer is “No.” Under the ACA, health
insurance companies can no longer put limits on
coverage based on a person’s health condition, often
called “pre-existing condition exclusions,” nor can they
charge a higher premium because of a person’s health
condition. These protections apply regardless of
whether a person purchases coverage through the
exchange or outside the exchange.
• Note: The prohibition on pre-existing condition
exclusions does not apply to individual grandfathered
plans (but does apply to group grandfathered plans).
47
Can an insurance company charge smokers more than
non-smokers?
• Under the ACA, health insurance companies
can ask about tobacco use before enrolling a
consumer in a plan, and can then charge
consumers who use tobacco products a higher
premium. Consumers in group plans may
avoid this extra charge by enrolling in a
tobacco cessation program.
48
What are preventive benefits and how are they covered?
• Preventive benefits are designed to keep people healthy by providing
screening for early detection of certain health conditions or for helping to
prevent illnesses. The ACA requires that plans cover many preventive
services with no out-of-pocket costs (meaning no deductibles, copayments, and coinsurance) for all plans beginning September 23, 2010.
Some of these covered preventive services are:
– Colorectal cancer screenings, including polyp removal for individuals over
age 50
– Immunizations and vaccines for adults and children
– Counseling to help adults stop smoking
– Well-woman checkups, as well as mammograms and cervical cancer
screenings
– Well-baby and well-child exams for children
• Unless an insurer does not have an in-network provider to perform a
particular preventative service, plans are permitted to charge for these
preventative services when performed by an out-of-network provider.
• For more information on preventive services, see healthcare.gov and do a
search for preventive services.
49
How does a consumer find out what drugs are covered by
a plan?
• Health plans maintain lists of which drugs are covered
and which are covered at the lowest costs. These lists
are called formularies. Drug cost-sharing is often
“tiered,” that is, consumers pay less for a generic drug,
more for a brand name drug, and sometimes even more
for a non-preferred brand name drug. Consumers
should review the formularies in any plan selected to
make sure they meet their prescription drug needs and
they know what cost sharing is required for any given
drug. For plans that use formularies, the SBC includes
an internet address (or similar contact information) for
obtaining information on the plan’s drug coverage.
Consumers can call their health insurer for help.
50
What are out-of-network services and do consumers have
any coverage for them?
• Services provided by a doctor, hospital, or other provider that does not have a
contractual relationship with a particular health plan are considered out-ofnetwork services. Not all plans cover out-of-network services, but when they
do, a consumer’s share of the cost is usually significantly higher than with an
in-network service. Consumers may want to find out whether a provider is innetwork before receiving services. Consumers may also want to find out if
their regular health care providers are in-network before purchasing a plan.
• Though the ACA limits how much money a person is required to spend on his
or her family’s health care, out-of-network services do not count towards these
limits.
• Plans (including many of those that will be offered through the Exchange) may
be only provide benefits when you use an in-network provider (called
Exclusive Provider Organizations or EPOs). You need to be sure that your
provider is included in the network (or be willing two change providers) before
purchasing coverage.
51
How do consumers determine whether their doctor or
dentist is in the network?
• For plans with a provider network, the SBC
includes an internet address or (similar contact
information) for getting a list of network
providers.
• It is always a good idea to check with a doctor
or dentist before scheduling an appointment to
confirm they are in the network.
52
Do consumers have access to emergency care out-ofnetwork?
• Yes, the ACA requires any health plan
providing benefits for emergency services to
cover them regardless of whether the provider
is in-network or out-of-network. Under the
ACA, health plans are not allowed to charge a
higher copayment or coinsurance for out of
network services received in an emergency.
South Carolina law also includes requirements
related to payments to out-of-network
providers for emergency medical services.
53
EMPLOYER-SPONSORED
COVERAGE
54
ACA Employer Updates
• The Department of Treasury announced on February 10, 2014 that
businesses with 50 to 99 full time equivalent employees will not face a
tax penalty under the Employer Mandate provision of the Affordable
Care Act (ACA) for not providing health care coverage to their
employees in 2015. According to one senior administration official, this
postponement is has been granted to allow medium sized employers “a
little more time to adjust to providing coverage.” In addition,
organizations with 100 or more full time equivalent employees will
only need to provide health insurance to 70 percent of their full time
employees in 2015 in order to comply with the Employer Mandate.
• This recently amended phase-in of the Employer Mandate (also known
as the “Play or Pay” requirements) will only impact the 2015
obligations. For 2016 and beyond, all businesses with 50 or more full
time equivalent employees must provide health care coverage to at least
95 percent of their full time employees as originally envisioned in the
ACA.
55
Is employer-based coverage required to cover dependents
(spouses and children)?
• Under the ACA, if an employer with 50 or more employees doesn’t offer
coverage that meet minimum standards to employees and their
dependents, and employees access premium tax credits through the
exchange, the employer may have to pay a tax penalty. However, the
proposed rules about employer shared responsibility have interpreted the
phrase “and their dependents” to mean children under age 26, but not
spouses.
• Small employers with fewer than 50 employees aren’t required to offer
coverage to employees or their dependents.
• Also, if employer-based coverage includes children, the ACA requires the
employer to let children up to age 26 stay on their parent’s policy. Adult
children can stay on their parent’s policy whether or not they live in the
parent’s home, are married, or the parent no longer claims them as a
dependent on their tax return. The employee can be required to pay for
this coverage, however.
56
What can a consumer do when employer-based health
coverage ends?
• Under the Consolidated Omnibus Budget Reconciliation Act
(COBRA), a federal health law since 1986, when an employee and
his or her dependents lose employer-based coverage they are still
eligible to continue on their employer’s group health plan, even
though that coverage would otherwise end. COBRA does not apply
to employers with fewer than 20 employees. Instead, state
continuation applies.
• However, COBRA coverage can be expensive, since the former
employer is not required to make premium contributions. Those who
have lost employer-based health coverage may be eligible to access
new tax credits to buy a more affordable individual or family policy
through the Health Insurance Marketplace.
57
If a consumer has access to employer-based coverage, can an
employer apply a waiting period before the consumer is eligible for
benefits?
• Yes, employers may require a waiting period
or probationary period before individuals
become eligible for benefits. Under the ACA,
this waiting period cannot exceed 90 days. For
more information, contact your employer’s
human resources department or consult the
health plan’s SBC.
58
Can a consumer with access to employer-based coverage receive a
tax credit to buy a plan through the Health Insurance Marketplace?
• If a consumer has access to employer-sponsored coverage that is affordable
and provides minimum value, the consumer will not be able to get tax credits
and cost-sharing reductions.
• Coverage is not affordable if the employer plan costs the consumer more in
premiums than 9.5% of his or her household income. The plan does not provide
minimum value if it pays for less than 60% of medical costs covered by the plan.
HHS and IRS have developed a minimum value calculator at
www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/mvcalculator-final-4-11-2013.xlsm, where consumers can enter information and
receive an estimate of whether a plan provides minimum value.
• An employer will know whether the plan it is offering fails to meet either of these
requirements and can provide a consumer with a minimum value written
statement. In the future the SBC document for the employer plan will include
whether the plan is above or below that 60% threshold.
• The State Health Plan does meet the minimum value standard and will meet
59
the affordable standard for most employees.
If a consumer has employer-based coverage, can that consumer’s
spouse receive a tax credit to purchase coverage through the
exchange?
• The premium tax credits are only available to a
spouse who does not have access to other
coverage. If the spouse can enroll in the
employee’s job-based plan, and the plan meets
the standards for adequacy, the spouse is not
eligible for the tax credit. Contact the Health
Insurance Marketplace to find out for certain.
60
How do employers with full-time and part-time employees know
whether they are required to offer health insurance?
• All employers will want to assess whether they will be
considered to have at least 50 full-time equivalent
employees once the federal calculation for determining
an employer’s number of full-time equivalent
employees is finalized. Penalties will be assessed
starting January 1, 2016 against employers with 50 fulltime equivalent employees not offering health coverage
in 2015, and will only be assessed if an employee gets
the premium tax credit.
– Below are links to the IRS proposed regulation and notice
of delayed implementation:
http://www.irs.gov/pub/newsroom/reg-138006-12.pdf
http://www.irs.gov/pub/irs-drop/n-13-45.PDF
61
Are there participation rates that must be met as a condition of
purchasing small group coverage in either the private marketplace
or SHOP?
• Insurers offering coverage in the market outside the Health Insurance
Marketplace may impose participation rates consistent with South Carolina
law. However, a small employer that can’t meet minimum participation
rates must be allowed to purchase coverage during an annual enrollment
period that begins November 15 and extends through December 15 of each
year.
• South Carolina law does not allow a small employer insurer to impose
more stringent requirements than the following:
–
–
–
–
–
–
For a small employer with more than 10 eligible employees, 70% of the group.
For a small employer with 10 eligible employees, 6 eligible employees.
For a small employer with 8 or 9 eligible employees, 5 eligible employees.
For a small employer with 7 eligible employees, 4 eligible employees.
For a small employer with 5 or 6 eligible employees, 3 eligible employees.
For a small employer with 2 to 4 eligible employees, 2 eligible employees.
62
What penalties exist if large employers do not provide coverage?
• Large employers may have to pay a tax penalty if they don’t offer
affordable coverage that provides minimum value for at least 95% of
their full-time employees and their dependents, or all but 5 full-time
employees, whichever is greater, and at least one of their employees gets
premium tax credits through the Health Insurance Marketplace. The
penalty will be imposed starting January 1, 2016 for coverage not offered
in 2015.
• The penalty for a large employer that fails to offer coverage to full-time
employees and their dependents is $2,000 multiplied by the number of
full-time employees, if at least one full-time employee has received a tax
credit from the Health Insurance Marketplace.
• Similarly, the penalty for a large employer that offers coverage that is
unaffordable or not of minimum value is $3,000 multiplied by the
number of full time employees receiving tax credits. (The maximum
penalty may not exceed $2,000 multiplied by the total number of all full
time employees.)
• Medicaid eligible employees cannot get tax credits, so employers will not
face penalties for employees who receive Medicaid coverage. When
calculating these penalties, employers may subtract the first 30 workers.
63
What ACA provisions apply to large employers?
• Non-grandfathered health plans offered by large
employers on either an insured or self-insured basis are
subject to a number of ACA requirements, including
limits on out-of-pocket expenditures, limitations on
waiting periods, the prohibition against annual or
lifetime dollar limits of coverage, the requirement that
coverage be offered for adult children up to age 26 and
for preventive services without cost sharing, and the
requirement of access to internal and external appeals.
Also, large employers are required to offer affordable
and adequate coverage, or face a tax penalty.
64
ACA REQUIREMENT TO
HAVE BASIC HEALTH CARE
COVERAGE (INDIVIDUAL
MANDATE)
65
What is the individual mandate, and does that mean consumers are
required to buy coverage through the Health Insurance
Marketplace?
•
Under the ACA, starting January 1, 2014, consumers and their dependent children are required to
have “minimum essential coverage” or pay a penalty, unless they cannot afford it or fit within
another exception. This is commonly referred to as the “individual mandate.” THE DEADLINE
FOR COMPLIANCE WITH THE INDIVIDUAL MANDATE HAS BEEN EXTENDED TO
MARCH 31, 2014.
•
Consumers may purchase a plan through the Health Insurance Marketplace in order to satisfy the
individual mandate, but they do not have to. Other forms of health coverage that satisfy the
requirement of having “minimum essential coverage” include most employer sponsored plans, union
plans, as well as enrollment in a government program such as Medicare, Medicaid, TRICARE or
CHIP. Consumers can continue to use agents and brokers to buy insurance available in the market
outside the exchange.
•
Some examples of health plans that do not meet the requirement of minimum essential coverage and
do not satisfy the individual mandate requirement to have basic health care coverage are insurance
coverage and discount plans that cover only specialty or ancillary services (for example, hearing,
chiropractic, etc).
•
Check the website https://www.healthcare.gov/what-if-someone-doesnt-have-health-coverage-in2014 for additional information.
66
What happens if a consumer does not satisfy the individual
mandate?
• Those who do not obtain coverage will pay a tax penalty beginning in
2014. The penalty is set to increase each year as follows:
– In 2014, it will be the greater of $95 per adult or 1% of taxable income above
the filing limit.
– In 2015, it will be the greater of $325 per adult, or 2% of taxable income above
the filing limit.
– In 2016, it will be the greater of $695 per adult, or 2.5% of taxable income
above the filing limit.
– After 2016, the tax penalty increases annually based on a cost-of-living
adjustment.
• A person will only pay 1/12 of the total annual penalty for each month
without coverage after three months. The penalty for a child is half that of
an adult and total liability for a family is capped at 300% of the individual
penalty. Only the first two children will be counted in calculating the
penalty. A maximum penalty will be calculated based on premiums for
plans offered through the Health Insurance Marketplace.
67
Are there any exceptions to the individual mandate?
•
Yes. The ACA lists the following who aren’t required to pay a penalty if they don’t have
health insurance coverage:
1.
2.
3.
4.
5.
6.
7.
8.
9.
•
Individuals and families whose income is low enough that they don’t need to file federal income tax
returns,
People who would pay 8% or more of the income for coverage, after taking premium tax credits and
employer contributions into account,
Individuals who have been uninsured for less than three months,
People who are incarcerated,
Individuals who are not lawfully present in the country,
Members of federally recognized American Indian tribes and individuals who are not members of
federally recognized American Indian tribes who can get services through an Indian health care
provider,
People who don’t have coverage because they belong to a religious group that objects to insurance
coverage,
People who are members of a health care sharing ministry, and
People who experience hardship in obtaining coverage.
The Kaiser Family Foundation has put together a flowchart to help consumers understand
who must have: http://healthreform.kff.org/en/the-basics/requirement-to-buy-coverageflowchart.aspx. There’s more information about who doesn’t have to pay a penalty if they
don’t have health insurance in the IRS FAQ at: http://www.irs.gov/uac/Questions-andAnswers-on-the-Individual-Shared-Responsibility-Provision.
68
What if a consumer already has health insurance
coverage?
• Consumers with health insurance coverage do
not need to do anything, unless they receive a
notice from their insurance company that their
health insurance does not qualify as
“Minimum Essential Coverage,” is being nonrenewed, or would otherwise no longer be
effective after a certain date.
69
ENROLLING IN HEALTH
CARE COVERAGE: WHERE
CAN I GET HELP?
70
There are several types of individuals trained to help consumers make
decisions regarding health coverage.
• Insurance agents or brokers;
• Navigators; and
• Certified application counselors.
Contact information is available on the DOI website for the entities that have
been awarded Navigator grants and their sub-grantees. Consumers can also
go to localhelp.healthcare.gov to find local assistance.
Beware of people asking for money to enroll you in health insurance
coverage. Legitimate enrollment assisters will NOT ask for money.
71
Where should consumers go with a problem enrolling in a
plan through the Health Insurance Marketplace?
• The Health Insurance Marketplace should be able to help
consumers resolve any problems in regards to enrollment.
• The federal government has sole responsibility over
enrollment issues.
Contact:
Health Insurance Marketplace
1-800-318-2596
www.healthcare.gov
Insurance agents and brokers, navigators, and certified
application counselors should also be able to help.
72
INFORMATION ON DATA SECURITY
73
Will assisters have access to consumers’ personal information,
including their tax returns?
• No, a consumer is not required to share personal information, including tax
returns with an agent or broker, navigator, or certified application counselor. If
a consumer is completing the application on healthcare.gov with the help of an
agent or broker, navigator or CAC, the consumer should be able to fill out and
submit their eligibility application without the agent, navigator or CAC in
direct view of the application. Income figures obtained from the IRS will not
be displayed during the application process, whether or not the consumer gets
help filling out the application or does it independently. After completing the
registration and training, agents or brokers, navigators, in-person assistance
personnel and certified application counselors will fill out a privacy and
security agreement and get a user ID to use with the Health Insurance
Marketplace.
74
Will consumers have to share their account username and password
with assisters?
• No. An agents, brokers, navigators, and
certified application counselors should not ask
for consumers’ account username and
password.
75
QUESTIONS ABOUT OTHER
TYPES OF COVERAGE
76
What is available in the market outside the Health Insurance
Marketplace?
•
In South Carolina, health insurance coverage will continue to be available in the
market outside the Health Insurance Marketplace. However, if consumers want to
take advantage of premium tax credits to help pay for part of their premiums, they
must purchase coverage through the Health Insurance Marketplace
Limited Benefit Plans:
• Consumers will still be able to buy plans in the market outside the exchange that
don’t cover the essential health benefits, such as insurance coverage and discount
plans that cover only specialty or ancillary services (for example, hearing,
chiropractic, etc.) Note, though, that these types of policies do not provide
minimum essential coverage and will not satisfy the individual mandate . The
NAIC has some resources discussing these types of plans:
– http://www.naic.org/documents/consumer_alert_high_deductible_plans.htm
– http://www.insureuonline.org/consumer_guide_cancer.pdf
– You may also contact an insurance agent or broker for help.
•
Note that these policies do not provide minimum essential coverage and will not
satisfy the individual mandate. Contact an insurance agent or broker for assistance.
77
If consumers already have coverage, may they buy separate policies
for their children?
• Consumers who already have coverage for themselves are
eligible to obtain a policy for a child through the Health
Insurance Marketplace. The ACA requires that any health
plan offered through the exchange must also be offered as a
child-only plan at the same tier of coverage. Consumers may
also be eligible for tax credits for child-only plans purchased
through the Health Insurance Marketplace.
• Consumers may be able to buy a child-only policy in the
market outside the Health Insurance Marketplace, either
directly from an insurer or through an agent or broker.
• A child may also be eligible for the Children’s Health
Insurance Program (CHIP). To learn more about CHIP plans,
visit www.insurekidsnow.gov.
• Note: children who are not citizens or legal residents of the
United States are not eligible for child-only plans through the78
Health Insurance Marketplace.
ACA MEDICARE-RELATED
QUESTIONS
79
Who should consumers contact with questions about Medicare,
Medicare Supplement, or Medicare Advantage plans?
• Medicare coverage, Medicare Supplement
Insurance, and Medicare Advantage plans are not
available through the Health Insurance
Marketplace. Questions involving the ACA and
Medicare, Medicare Supplement Insurance, or
Medicare Advantage Plans should be directed to
CMS. The federal government’s Medicare
website, www.medicare.gov, also has additional
information about health reform and Medicare
changes.
80
Is there anything that consumers and their dependents who are
already on Medicare and employer-based coverage need to do
because of the ACA?
• Generally, there is nothing consumers need to do
because the ACA if they are already on Medicare and
have employer-based coverage. If consumers have
coverage through an employer, and that employer’s
current benefits pay first and Medicare pays second, the
ACA does not change that.
• If the employer changes the benefits that cover
consumers or their dependents, then they will send
consumers a notice about those changes. Consumers
can ask their employers’ human resources department
how those changes work with Medicare.
81
Is there anything that consumers and their dependents who are
already on Medicare and retiree coverage from an employer need to
do because of the ACA?
• The new federal law does not change those
benefits. Consumers should contact their
employers’ human resources department for
help.
82
Will consumers with Medicare Supplement
insurance be affected by the ACA?
• No. There are no changes to cost sharing for
Medicare supplement policies as a result of the
ACA.
83
How will consumers’ Medicare prescription drug “donut
hole” be affected?
• The ACA began closing the “donut hole” in 2011, and it
is anticipated that the “donut hole” will be closed by
2020. This means that Medicare beneficiaries whose
prescription drug costs exceed the Part D deductible
will need to pay only a 25% coinsurance rate until their
expenditures reach the catastrophic level. The “donut
hole” is being closed by combining a 50% discount on
the cost of brand-name drugs and a gradual increase in
the share of prescription drug costs for both generics
and brand-name drugs that Medicare pays, until a
beneficiary only owes 25% of the total cost.
84
Will consumers with Medicare Advantage plans be
affected by the ACA?
• Yes. The ACA implemented quality incentives for
Medicare Advantage plans. In addition, it limited
plans’ ability to impose cost-sharing on certain highcost services. Some Medicare Advantage plan members
may, therefore, experience better performance and
coverage on the part of their plans. The ACA also
imposed cuts on the Medicare Advantage program
intended to align payments for Medicare Advantage
plans more closely with the amount that Medicare pays
for beneficiaries in the fee for service, or traditional,
Medicare program. This may mean increased premiums
or reduced coverage under some Medicare Advantage
plans.
85
What about long-term care insurance policies?
• The Health Insurance Marketplace does not
include long-term care insurance policies, and
policies sold on the Health Insurance
Marketplace do not typically cover long-term
care services. Long-term care insurance
continues to be sold through insurance agents
and brokers outside the exchange.
86
ACA RELATED MEDICAID
QUESTIONS
87
Has SC expanded Medicaid eligibility under the ACA?
• No. South Carolina did NOT expand Medicaid eligibility to all individuals
under 138% of the Federal Poverty Level. Eligibility remains unchanged.
Who is eligible for Medicaid in SC?
• A Medicaid eligibility worker will determine whether or not you are eligible
for South Carolina Healthy Connections (the name of the Medicaid program
in SC) based on the information you gave in your Medicaid application.
• In order to get benefits, you must meet certain financial and non-financial
requirements and belong to one of the following groups:





pregnant;
age 65 or older;
blind or totally and permanently disabled;
under the age of 19; or
a parent or caretaker relative living with a child under age 18 (low-income
families)
88
Where can consumers find more information about
Medicaid?
• Contact the South Carolina Department of
Health and Human Services at 1-888-549-0820
or online at www.scdhhs.gov with any
questions or concerns about Medicaid and the
ACA.
• Additionally, the HHS website has basic
information about Medicaid posted at
www.healthcare.gov.
89
QUESTIONS ABOUT
WHETHER A PLAN IS
LEGITIMATE
90
Why is this a time especially to be on guard against health
insurance fraud?
• The health insurance reforms now underway during the
implementation of the ACA are bringing big changes. Few
Americans are aware of all the ACA requirements and details.
Unfortunately, experience shows that during times of big change or
confusion, fraud flourishes.
• As the ACA is phased-in, con artists posing as representatives of the
federal government or legitimate insurance agents, brokers, or
Navigators might try to steal consumer’s money or identity through
various health insurance schemes. For instance, criminals might try
to convince consumers to reveal personal information to receive a
“national health insurance card” or a new Medicare card under the
ACA. Or they might try to sell consumers health insurance policies
that are fake and worthless.
91
Remember this simple formula: STOP – CALL – CONFIRM
• STOP – Consumers should ask the person for identification and a phone number
where they may be reached at a later time. If the person refuses to provide this
information for any reason, or attempts to pressure them into signing any
document, consumers should immediately hang up, close their door, or walk
away.
– Consumers should NOT volunteer their Social Security number or a credit/debit card
number to anyone unless they personally know the individual. Likewise, they should
NOT sign any paperwork or write a check.
• CALL – Consumers should then contact the South Carolina Department of
Insurance or the Health Insurance Marketplace. The insurance company or agent
or broker, as well as the navigator, must be registered or licensed with the South
Carolina Department of Insurance before they are permitted to participate in
selling coverage or counseling consumers through the Health Insurance
Marketplace.
• CONFIRM – Consumers should always confirm that the company, agent, or
broker offering insurance coverage, or the Navigator trying to provide assistance,
is legitimate before they sign any documents or provide any personal information.
– Remember that if something seems too good to be true, it usually is NOT true.
92
93
Questions?
94
Thank You!
The End
95