Transcript What Now? Moving Forward with Reform

IIABL PPACA HEALTH CARE SUMMIT
By Michael Bertaut,
Healthcare Economist and Exchange Coordinator
Blue Cross and Blue Shield of Louisiana
7.1 GP
By Michael Bertaut,
Healthcare Economist and Exchange Coordinator
Blue Cross and Blue Shield of Louisiana
7.1 GP
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All information in this presentation INCLUDING THE OPINIONS OF THE
PRESENTER are solely for illustrative purposes. The information is based on
certain assumptions, interpretations, and calculations that are not necessarily
accurate with regard to provisions of PPACA, HCERA, HIPAA, COBRA, ERISA,
and other rules, regulations, guidance and all other documents issued by
relevant state and federal agencies with regard to these laws and any other
relevant laws. The information provided should not be considered as legal,
financial, accounting, planning, or tax advice. You should consult your
attorneys, accountants, and other employees or experts of this type of this
type of advice based on their own interpretations, calculations, and
determinations of applicable laws, rules, regulations, guidance, and any
other documents and information that they determine may be relevant. The
authors make guarantees or other representations as to the accuracy or
completeness of the data in this presentation.
BCBSLA expressly disclaims any liability for information obtained from use of
this presentation by any BCBSLA employee or by any other person. No
warranty of any kind is given with regard to the contents of the presentation.
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 The
Marketplace @
Healthcare.gov
 New Requirements
for Health Insurance
Companies
 New Requirements
for Businesses.
 BREAKING
NEWS!!!!
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The Fed published guidance on 9/18 that indicates
the EXPECTATION that all ERISA health plans that
offers spouse coverage MUST acknowledge same-sex
couples married in states where such unions are
legal. (non-gov, non-church)
This does not apply to “domestic partnerships” or
“civil unions”.
They must be offered the same coverage as
opposite-sex spouses.
This is true even in states that have laws against such
coverage.
Louisiana, with a Constitutional Definition of Marriage
and admonitions AGAINST recognizing same-sex
marriage, has not announced any legal challenges.
Employer Based
~160m
The Affordable
Care Act was NOT
designed, nor is
their enough
money allocated,
to replace the
Employer-Based
Health Insurance
System.
Government
~100m
Individual
~15m
Healthcare.Gov!
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Yes. As of 1/1/14
Exemptions:
◦ Low-income individuals who cannot afford
coverage;
◦ Undocumented immigrants;
◦ Indian tribal members and their dependents;
◦ Individuals with a coverage gap of three or
fewer months;
◦ Members of certain religious sects
◦ Individuals who are in prison
◦ Low-income individuals in states that have
opted out of the Medicaid expansion
◦ Employees whose employer has transitional
relief, during the relief period.
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Failure to comply means confiscation of
tax refund starting at $95 or 1% for first
year and rising to $695 or 2.5% of
income by 2017.
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WHAT’S THE PLAN?
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HOW DOES IT WORK?
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WHEN DOES IT OPEN?
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WHAT CAN I BUY THERE?
◦ To create a streamlined, easy to use, consumer friendly,
health neutral, gender neutral, FEDERALLY REGULATED
market for individual health insurance.
◦ Designed specifically to remove the 2 biggest barriers to
health insurance: Cost and Health Status, with federal
subsidies and no medical questions allowed.
◦ 10/1/2013. Closes again on 3/31/2014
◦ Subsequent years open enrollment will be about 8 weeks
long (October 15 – December 7th)
◦ Health, Dental, and maybe Vision insurance from many
major carriers. Each state will have its own unique
exchange and product selection.
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Loss of Minimum
Essential Coverage
(except for nonpayment)
Marriage (60 days from
marriage date), Birth, or
Placement for Adoption
(60 day window)
Gain citizenship or
qualifying immigration
status
Loss of AFFORDABLE
employer sponsored
coverage (COBRA?)
Carrier violates insurance
contract
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Change in eligibility for
tax credits or cost
sharing reductions
Move to a different
Exchange Area
Indians may change
plans once per month
Undefined “exceptional
circumstances”
Enrolled in nonqualifying employer
coverage
New Insurance Rating ORDERED By PPACA
Risk
Factor
Pre-2014
And GF
Post-2014
Non-GF
Rate Changes
by Class
AGE OF
INSURED
RATE MAY VARY UP TO
10X BETWEEN 19 AND
64 YEAR OLD
RATE MAY VARY
ONLY 3X BETWEEN
21 YEAR OLD AND
64 YEAR OLD
YOUNGER
GENDER
HEALTH
STATUS
WOMEN CHARGED MORE
DURING CHILDBEARING
YEARS. MEN CHARGED
MORE POST AGE 55
GENDER MUST BE
IGNORED FOR
RATE SETTING
OLDER
MEN
WOMEN
MEDICAL RECORDS,
HEALTH
HEALTHY
CLAIMS DATA,
INFORMATION
PHARMACY RECORDS,
CANNOT ALTER
ALL USED TO DETERMINE
RATES OR
SICK
Issue” means the
RATE OR OUTRIGHT “Guarantee
EXCLUDE ANYONE
EXCLUDE APPLICANT emptying of high risk pools and
the sickest will get health
FROM COVERAGE
insurance for the same rates as
the healthy.
Tax/Fee
Cost
When?
Who Pays?
PCORI Fee
$1 or $2 PMPY
$1 for Plan
Years <
10/1/13; $2
After that
Carrier for Fully
Insured; Sponsor
for Self-Funded
Transitional
Reinsurance Fee
$63 PMPY 2014;
Lower afterwards
2014 and
Beyond
Carrier for Fully
Insured; Sponsor
for Self-Funded
Health Insurer
Fee
$40M La 2014
$8B Nationally;
$70M+ La 2017
$14.3B Nationally
2014 and
Beyond
Carrier for Fully
Insured
Exchange Fee
3.5% of Premiums
in Exchange (FFE)
2014 and
Beyond
Carrier for fully
insured
Unearned
Income Tax
3.8% on unearned
above $200k
single/$250k joint
2013 and
Beyond
Individual Tax
Payer
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All Individual and Small Group Plans MUST
match the Benchmark Essential Health
Benefits Plan in breadth of coverage.
For 2014/15, in Louisiana, the Benchmark
will be the coverage offered in
BLUE CROSS GROUPCARE PPO on
12/31/2011
◦ This is a very rich plan. Includes pregnancy
coverage on all members, mental/nervous/ autism
spectrum disorder, and a very wide formulary.
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Moving from 5-6:1 to 3:1 on age rating
Guarantee Issue Coverage
Gender neutralization
Dissolution of High Risk Pools
Exchange-COBRA connection in ASO
No rate adjustments for health status
Health status of uninsured
Reduction in Medicaid maternity coverage
Expansion of Private maternity coverage
Essential health benefit requirements in coverage
Taxes/Fees on Carriers
Removal of “Dial-a-risk” options
Carrier compliance Costs
Carrier system build-out costs
AGE &
Gender
2013
Blue
Max
$2500
2014
Blue
Max
$2500
%
Change
In Rates
AGE &
Gender
2013
Blue
Saver
$1,900
2014
Blue
Saver
$1,900
%
Chang
e in
Rates
30 YR
Male
$160.03
$294.08
+84%
30 YR
Male
$146.07
$298.04
+104%
40 YR
Male
$222.46
$331.13
+49%
40 YR
Male
$203.06
$335.60
+65%
60 YR
Male
$533.88
$703.20
+32%
60 YR
Male
$487.33
$712.68
+46%
30 YR*
Female
$417.71
$294.08
-30%
30 YR*
Female
$415.64
$298.04
-28%
40 YR*
Female
$493.48
$331.13
-33%
40 YR*
Female
$484.79
$335.60
-31%
60 YR*
Female
$680.64
$703.20
+3%
60 YR*
Female
$655.62
$712.68
+9%
* 2013 rates include maternity for females, coverage was actually carried by only 10% of females covered. 2014
rates must include maternity for everyone, including males.
Social Security Numbers (or document numbers for
legal immigrants)
 Employer and income information for every
member of your household who needs coverage
(for example, from pay stubs or W-2 forms—Wage
and Tax Statements)
 Policy numbers for any current health insurance
plans covering members of your household
 A completed Employer Coverage Tool (see page 2
of this checklist) for every job-based plan you or
someone in your household is eligible for. (You’ll
need to fill out this form even for coverage you’re
eligible for but don’t enroll in.)
Family
Ages
Issuer
Metal Level
Typical Sample Premium
Adult 1
40
Adult 2
36
B
B(Benchmark)
Bronze
Silver
$10,908
$12,120
Child 1
6
Child 2
4
B
Gold
$13,332
B
Platinum
$15,350
Family Income $35,000/year (149% of FPL)
Premium Tax Subsidy $10,734
Family pays: $174
Payment % of Income 0.4%
$10,734
$1,386
4.0%
$10,734
$2,598
7.4%
$10,734
$4,616
13.2%
Family Income $88,000/year (375% of FPL)
Premium Tax Subsidy $3,760
Family pays: $7,148
Payment % of Income 8.1%
$3,760
$8,360
9.5%
$3,760
$9,572
10.9%
$3,760
$11,590
13.2%
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Plan TYPE
Income of
Applicant
Deductible
In Network
COINSURANCE
In Network
MAX OUT OF
POCKET
Sample
Benchmark
Silver
Individual
251% of FPL
or above
$2,000
80%
$4,000
201% to
250% of FPL
$2,000
80%
$3,000
151% to
200% of FPL
$500
80%
$1,400
100 to 150%
of FPL
$0
95%
$1,300
Note: Cost Sharing Reductions are ONLY available on Silver
Plans, not Bronze, Gold, or Platinum plans.
This is a sample computation, not an actual product.
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Incarcerated.
Income above 400% of FPL.
Offered coverage at work that is affordable and
at least 60% AV.
Medicaid or CHIP eligible (income <138% fpl in
states that have agreed to expand).
Failed to file required tax returns in previous
year.
Member of a tax household getting affordable
coverage offer from employer
Unable to attest to residency in a single state.
In the country unlawfully.
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The Small Business Health Options Plan
(SHOP) exchange will list small group options
from a variety of health carriers that can be
purchased online. Groups 2-50 in 2014.
ALE’s are not SHOP-eligible.
IRS tax credits for low income small group
coverage that began in 2010 will phase out of
the general market in 2014 and only be
available if you purchase on SHOP.
Several key features of SHOP have been
delayed at least one year, possibly longer.
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How many benefit eligible Employees do I
have?
Am I an Applicable Large Employer (ALE)?
ALE Yes, or No, What do I do?
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Any employee who averaged 30
hours of service per week or more
in the previous look-back period (3
to 12 months.)
Any new hire who, after 90 days, is
REASONABLY EXPECTED to work
more than 30 hours/week
If a REASONABLY EXPECTED
determination cannot be made after
90 days, then another 90 day
period may be used to make the
call.
If eligibility determination is made,
and then hours change, coverage
must continue for the LONGER of
the look-back period or 6 months.
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FOR THE ALE
COMPUTATION, the
common law definition of
employee must be used:
“Under common-law
rules, anyone who
performs services for you
is your employee if you
can control what will be
done and how it will be
done. This is so even
when you give the
employee freedom of
action. What matters is
that you have the right to
control the details of how
the services are
performed.”
(www.irs.gov)
Controlled , Affiliated and Associated Groups
Must be COMBINED for this computation!!!
Month
Benefit
Eligible
Common
/120 FTE
Law Hours
Total FTE
JAN 2014
22
3300
27.5
49.5
FEB 2014
23
2800
23.3
46.3
MAR 2014
23
3250
27.1
50.1
APR 2014
23
3450
28.8
51.8
MAY 2014
24
3105
25.9
49.9
JUNE 2014
22
3271
27.3
49.3
JULY 2014
23
3655
30.5
53.5
AUG 2014
24
3705
30.9
54.9
SEPT 2014
25
3000
25.0
50.0
OCT 2014
26
3800
31.7
57.7
NOV 2014
27
3950
32.9
59.9
DEC 2014
30
4250
35.4
65.4
AVERAGE
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No obligations to
provide affordable
coverage
No obligations to
provide valuable
coverage
No obligations to offer
coverage
No danger of fines under
4980H
You must still be able to
demonstrate your NonALE status.
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You have many new Federal Obligations that can
be condensed into 3 major options:
1. AVOID FINES--Must offer “affordable”, “minimum
value” health coverage to 95% of all benefit eligible
employees. Must offer coverage to children under age
26 (but not spouse and subsidy not required). MUST BE
OFFERED AT LEAST ONCE PER PLAN YEAR!!!!
2. RISK SOME FINES—Offer coverage that fails one of the
tests in #1 above. Employer is fined $250 per month
per employee who “leaks” to the Exchange. Max fine is
total fine computed under “3” below.
3. PAY THE FINES –Fail to offer minimum essential
coverage to at least 95% of your benefit eligible
employees, employer must pay $2,000 per year per
uncovered employee minus first 30 lives.
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4980h a) Fine “ALPHA”
◦ Requires that all ALE’s offer minimum essential coverage to
AT LEAST 95% of their benefit eligible employees.
◦ If no compliance, only ONE benefit eligible employee has to
draw an advanced tax credit from an Exchange to trigger the
fine.
◦ Fine is ENTIRE BENEFIT ELIGIBLE WORKFORCE COUNT minus
30 x $166.67/month without coverage.
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4980h b) Fine “BRAVO”
◦ Requires that the offer in a) be “affordable” and “at least 60%
actuarial value”.
◦ If no compliance, each benefit eligible employee drawing an
ATC from Exchange will trigger a $250/month fine, up to a
max of the fine computed in a).
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Federal Poverty Line:
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Rate of Pay:
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9.5% of Employee Box 1 W-2 income in premiums for
employee-only coverage.
◦ Use 100% of FPL x 9.5% = affordable premium for all
employees.
◦ In 2012, would be $11,170 x 9.5% = $1,061.15
◦ Use hourly rate times 130/month to determine wages x 9.5% to
compare to premium.
◦ At $10/hour, $1,300/month x 12 x 9.5% = $1,482.00
◦ Determined at end of calendar year, and on an employee-byemployee basis.
◦ Partial-year adjustments allowed for new employees who work
part of a year.
◦ At $20,800/year ($10/hr, 40 hrs/week) = $1,976.00
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Designed specifically to inform employees on
several important health insurance related issues.
(Different notices for those who choose not to
offer coverage)
◦ The existence and availability of Exchanges/Marketplaces
◦ The type of employer coverage and who qualifies
◦ Whether employer coverage complies with federal rules
thus blocking the employee from Advanced Tax Credits on
the Exchange.
◦ Confusing. May encourage non-eligible employees to
shop on the Exchange.
◦ Existing must get within 15 days of hire date
Note: Form encourages employees
to take a look on the Exchange,
even IF YOU OFFER THEM
COMPLIANT COVERAGE!!!
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Prove you are NOT AN ALE
Prove the employee in
question was never benefit
eligible when he worked for
your firm
Prove the employee in
question was offered an
insurance plan that met the
federal definitions of
affordability, and offered at
least 60% AV.
Not subject to Rate
Compression or New Federal
Underwriting Laws
• Not subject to 3:1 age rating
• Can keep existing
rate/benefit plans
• Not required to add new
coverage for USPTF Schedule B
tests/immunizations at first
dollar.
• Not required to add new
Women’s Wellness coverage at
first dollar.
•
“You’re Darn Tootin’
Listen to your
Grandfather!!”
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Total spend accumulators on every plan (all
like HDHP’s)
Age-rated (non composite) billing
Every non-GF or new plan must fall into
metallic levels:
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Bronze= 58-62% AV
Silver = 68-72% AV
Gold = 78-82% AV
Platinum = 88-92%
“SMALL” GROUP = 2-50 FOR 2014-15, 2-99 IN
2016!
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Civic Organization designed to provide unbiased
information on PPACA
Healthcare and Wellness Information
Focused on explaining drivers of healthcare
costs, the critical importance of personal
wellness, and the need for access to quality
healthcare for all Louisiana’s citizens.
Solely an educational resource, not seeking to
create public policy
Over 100 member organizations, including LDOI!
JOIN THE EFFORT @ www.lhec.net
Office: 225-297-2719
Cell: 225-573-2092
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