Health Care Reform/ Plan Sponsor Impact

Transcription

1 Health Care Reform/ Plan Sponsor Impact Conference Forum March 2013

2 Health Care Reform Update

3 Agenda Review of ACA* s Major Reforms 2014 Key Recent Guidance from Regulators Pay or Play Rule Key Concerns for Local Churches Key Concerns for Annual Conferences * ACA: Affordable Care Act (Patient Protection and Affordable Care Act, PPACA) 3

4 ACA 2014: Near-Universal Coverage Individual Mandate Individual insurance market reforms Health Insurance Exchanges Government assistance for modest income premium tax credits (PTCs) Employer Shared Responsibility Pay or play or employer mandate Expanded Medicaid Medicare 4

5 Medicaid Expansion ACA expands traditional Medicaid to cover all individuals at or below 138% of FPL* Traditional Medicaid varies by state Expansion intended to cover most Americans below the threshold for PTCs (100% FPL) Supreme Court ruling: Penalty on states for refusing to expand Medicaid overly coercive Result: States can refuse Medicaid expansion * FPL federal poverty level 5

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7 Exchanges Regulated marketplaces for individuals and small employers to obtain health insurance Individuals: Exchange plan premiums subsidized with PTC for individuals with household income* % of FPL SHOP: Small employers (<100 employees) can adopt exchange plans as employer coverage Employer covers all full-time employees No PTCs for employees Employee choice of plans delayed until 2015 in federal exchange Small Business Health Care Tax Credit continues for small businesses in 2014 (for up to 2 years) * Household income = modified adjusted gross income (MAGI) 7

8 Who Qualifies for PTCs? Individuals who are NOT: Incarcerated Covered by Medicare or Medicaid Covered by other government coverage: CHIP, TRICARE, VA, etc. Offered affordable employer plan with minimum value Enrolled in employer plan (even if not affordable ) Household income > 400% FPL Household income < 100% FPL Married, filing separately 8

9 PTC Eligibility Requirements Two main requirements (both required to be PTC-eligible ) Household income* Between 100% and 400% of FPL Inadequate or no employer coverage No employer coverage Employer coverage is less than minimum value Employer coverage is not affordable to employee * Household income is considered modified adjusted gross income (MAGI); for UMC clergy, MAGI excludes housing. 9

10 PTC Eligibility: % of FPL* Household Income (MAGI) % FPL Single Family of 2 Family of 3 Family of 4 100% $11,850 $15,996 $20,142 $24, % $16,353 $22,074 $27,796 $33, % $17,775 $23,994 $30,213 $36, % $23,701 $31,992 $40,284 $48, % $29,626 $39,990 $50,355 $61, % $35,551 $47,988 $60,426 $73, % $47,401 $63,984 $80,868 $97,815 >400% >$47,401 >$63,984 >$80,868 >$97,815 * Estimated 2014 federal poverty level (FPL) 10

11 MAGI Modified adjusted gross income is defined (Code 36B) as taxpayer s adjusted gross income (AGI) defined in Code 62, increased by three items: Amounts excluded from gross income under Code 911 (i.e., foreign earned income) Amounts of tax-exempt interest Amounts of the taxpayer s Social Security benefits excluded from gross income under Code 86 In general, AGI can be found on the last line (line 37) of Page 1 of taxpayer s Form 1040 Clergy housing/parsonage (not included in gross income) MAGI reduced by elective deferrals to 401(k)/403(b) plans like UMPIP 11

12 UMC* Clergy and FPL 2% Medicaid* Eligible 48% Core PTC Eligible 7% Close to PTC-eligible 43% No PTC * Data based on clergy in HealthFlex only. 12

13 PTC Eligibility Minimum Value Employer plan must pay 60% of total costs of plan (actuarial determination) Employees whose employer plan does not cover minimum value can opt out and seek PTCs for exchange coverage Plan sponsors can use Minimum Value Calculator (published by IRS* and HHS**) HealthFlex and most annual conference plans should easily satisfy this requirement. * IRS Internal Revenue Service ** HHS Department of Health and Human Services 13

14 PTC Eligibility Affordable Coverage Employee s required contribution (share of premium) for participant-only (single) coverage under employer plan cannot exceed 9.5% of household income* (MAGI) If employee contribution exceeds 9.5% of household income, employee can opt out; choose exchange coverage and PTC Final rule for dependent coverage not favorable Cost to cover dependents affordable as long as it does not cost the employee more than 9.5% of MAGI to cover self-only * Employers often have no information about employees household income 14

15 Three Affordability Rules ACA has several differing definitions Eligibility for PTCs if employer plan is unaffordable 9.5.% of MAGI for self-only coverage Employer avoiding pay or play penalty Safe Harbor: 9.5% of W-2 wages (known to employer) for self-only coverage Individual avoiding the mandate penalty 8% of MAGI 15

16 Affordability Examples Rev. Ryan s MAGI = $47,000 Total compensation: $60,000 minus $10,000 housing exclusion $3,000 UMPIP contribution Grace UMC offers plan through annual conference Rev. Ryan contributes $1,800 for self-only coverage (3.8% of MAGI) Rev. Ryan has minimum essential coverage Ineligible for PTC 16

17 Affordability Examples Rev. Ryan has wife and three kids Rev. Ryan pays $6,000 for family coverage Contribution = 12.8% of MAGI But, $1,800 is cost for self-only coverage is < 9.5% of MAGI (3.8%) Plan is affordable for Rev. Ryan and family (despite costing 12.8% of MAGI) Rev. Ryan, wife and kids have minimum essential coverage and are ineligible for PTCs Dependents can decline employer coverage and not receive Individual Mandate penalty (>8% of MAGI) 17

18 Health Insurance Exchanges State-based; single risk pool State-based exchange (17 states) Federally-facilitated exchange (FFE) (26 states) Partnership exchange (7 states) All exchanges eligible for PTCs Only insurance companies may offer coverage HHS suggests future guidance may cover church plans Church Alliance effort allow church plans (October 31, 2011 and January 4, 2012 comment letters) Outlook less positive after Final Multi-State Plan Program Regulations rejected church plan argument 18

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20 Insurance Market Reforms Guaranteed Issue and Renewal: Insurers cannot deny or cancel coverage due to health condition, health claims or pre-existing conditions Community-rating: Premium rate variation limits Age: 3:1 (age 21 to 64) Tobacco use: 1.5:1 Family size Geography (regional cost factors) Rates for young/healthy will rise Rates for older, less healthy will fall 20

21 Essential Health Benefits (EHBs) Ambulatory patient services (i.e., outpatient care) Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment Prescription drugs Rehabilitative and habilitative services and devices Laboratory services Preventive and wellness services, and chronic disease management Pediatric services, including oral and vision care 21

22 Essential Health Benefits EHB Benchmark Plan 4 state options Largest health plan by enrollment in small group market (default if state makes no choice) Any of top 3 state employee health benefit plans Any of top 3 federal employee health benefit plan options Largest insured non-medicaid health maintenance organization (HMO) operating in the state EHB Rule does not apply directly to self-insured plans (like HealthFlex and many annual conference plans) Indirectly applies (e.g., through annual limits prohibitions) 22

23 Exchange Plans Bronze Silver Gold Platinum Group Plans Actuarial Value 58-62% 68-72% 78-82% 88-92% 60% Covered Services Essential Health Benefits Essential Health Benefits & Preventive Services Essential Health Benefits & Preventive Services Essential Health Benefits & Preventive Services Essential Health Benefits & Preventive Services No Annual Limits No Annual Limits No Annual Limits No Annual Limits Preventive Services (Need not cover Essential Health Benefits) No Annual Limits (if covered) 2014 Deductible Maximums $2,000 Indvidual; $4,000 Family $2,000 Indvidual; $4,000 Family $2,000 Indvidual; $4,000 Family $2,000 Indvidual; $4,000 Family None 2014 Out of Pocket Maximums* $6,250 Indvidual; $12,500 Family $6,250 Indvidual; $12,500 Family $6,250 Indvidual; $12,500 Family $6,250 Indvidual; $12,500 Family $6,250 Indvidual; $12,500 Family * 2013 values (IRS will publish 2014 values soon) 23

24 Exchanges and Employers Employee enrolls in exchange and chooses a Qualified Health Plan (QHP) Exchange verifies employer coverage if possible (in 2014 only FEHBP or SHOP) Enrolls individual based on attestation of no employer coverage or unaffordable Exchange verifies random individuals Notifies individual that it will contact employer Exchange contacts employer Employer can appeal exchange eligibility 24

25 Illustrative Exchange Premiums* $650 $1,950 * Premiums based on Mercer estimate 25

26 Value of PTCs Single Individual Single % FPL Premium as % of Income Median Income Enrollee Cost for Silver Plan (Mercer) PTC "Subsidy" 138% 3.00% $16,332 $490 94% 150% 4.00% $17,752 $710 91% 200% 6.30% $23,669 $1,491 81% 250% 8.05% $29,587 $2,382 69% 300% 9.50% $35,504 $3,373 57% 400% 9.50% $47,339 $4,497 41% >400% No Max >$47,339 $7,800 0% 26

27 Value of PTCs Family of Four Family of Four % FPL Premium as % of Income Median Income Enrollee Cost for Silver Plan (Mercer) PTC "Subsidy" 138% 3.00% $33,474 $1,004 96% 150% 4.00% $36,385 $1,455 94% 200% 6.30% $48,513 $3,056 87% 250% 8.05% $60,641 $4,882 79% 300% 9.50% $72,770 $6,913 70% 400% 9.50% $97,026 $9,217 61% >400% No Max >$97,026 $23,400 0% 27

28 How PTC Works UMC minister (Rev. Lisa) making median compensation: Median: $ 56,795 Housing allowance: $ 12,695 UMPIP contribution: $ 600 MAGI: $ 43,500 28

29 PTC Example Rev. Lisa Non-working spouse and two children Employer coverage through local church Pays $350/month for participant (self) coverage Pays $400/month for dependent coverage Rev. Lisa does not have affordable coverage $350/month > 9.5% of MAGI ($344/month) Chooses Silver Plan through state exchange Qualifies for PTC based on income 29

30 PTC Example Rev. Lisa Exchange will notify IRS IRS may verify with church that coverage is not affordable IRS assesses pay or play penalty if applicable (if church is large employer ) Silver Plan: $23,400 ($1,950/month) PTC may be advanced (before claimed directly on tax return; paid directly to exchange) Rev. Lisa pays $230/month premium; HHS pays Silver Plan insurer $1,720/month (PTC: $20,640) 30

31 What If? Rev. Lisa s spouse unexpectedly nets $18,000 income in 2014? Rev. Lisa s MAGI is higher than expected: $61,500 vs. $43,500 Actual PTC: Qualifies for $18,480 Advanced PTC: Received $20,640 May owe IRS up to $2,160 PTC repayment limited to $1,500 if MAGI is less than 400% FPL 31

32 New Guidance HRAs* in 2014 Employer/Employee Matters New Fees on Plans Plan Design Rules Individual Mandate * HRA health reimbursement arrangement 32

33 HRAs in 2014 Agency FAQ disfavors stand-alone HRAs Stand-alone HRAs will run afoul of prohibition on annual limits on essential health benefits HRAs integrated with health plan allowed HRAs cannot be integrated with individual insurance policies (e.g., those bought from exchanges or in private market) Non-integrated HRAs allowed for retirees 33

34 Exchange Notice March 1, 2013 postponed Likely late Summer 2013 Closer to October 1, 2013 exchange open enrollment Duty of all employers Fair Labor Standards Act (broad definition) Local church obligation Provided to all employees Awaiting guidance on Notice form/content 34

35 Employee Protections Department of Labor (OSHA) issues rule protecting employees from retaliation Reporting violation of ACA protections or cooperating in investigation Receiving a PTC Even if PTC receipt causes pay or play penalty to employer Complaint process with OSHA 35

36 Research Fee Funds Patient-Centered Outcomes Research Institute (PCORI) Applies to insured and self-funded plans, (i.e., retiree plans) Does not apply to excepted benefits (vision, dental, EAP) One fee for multiple self-funded plans with same plan year Plan years ending after October 1, 2012/ before October 1, 2019 $1 per covered life in 2012 $2 per covered life in 2013 (indexed in later years) Information return (Form 720) and payment due by July 31 of following year July 31, 2013 for 2012 plan year 36

37 Reinsurance Program Fee Three-year assessment ( ) to fund reinsurance programs for exchanges Applies to all fully-insured and self-funded group health plans Paid directly by plan sponsor or through TPA $65 per covered life in 2014 Likely to be lower in 2015 and 2016 Timeline Head count to HHS: November 15, 2014 Invoice from HHS: December 15, 2014 Payment due: January 15,

38 Reinsurance Fee Exceptions No express exemption of retiree plans However, not applied with respect to any covered life for whom Medicare is primary payer Health flexible spending accounts (FSAs) Employee assistance programs (EAPs) Disease management programs Stand-alone vision and dental plans Stand-alone prescription drug plans Wellness programs Health savings accounts (HSAs) Stop-loss and indemnity reinsurance policies HRAs that are integrated with a group health plan 38

39 Wellness Program Expansion Expands HIPAA s bona fide wellness program exception to prohibition on varying benefits based on health status Similar to 2006 guidance, but with expanded rewards contingent on health outcomes Increase to 30% (from 20%) of total value of employer and participant contributions 39

40 Cost-Sharing Self-insured and large group (50+) employer health plans Exempt from deductible maximums in 2014 $2,000 single; $4,000 family Plans retain flexibility Subject to out-of-pocket maximums in 2014 Tax Code rules for high-deductible health plans (HDHPs) $6,250 single; $12,500 family (2013 values) 40

41 Minimum Value Employer plan must cover 60% (actuarial value) of total plan costs (claims costs) If plan does not cover minimum value, can expose plan sponsor to pay or play penalties Minimum Value Calculator Tool for plan sponsors to assess plans Other safe harbor methods for minimum value Checklist of plan design features (coming soon) Actuary s certification 41

42 Individual Mandate Rule: Have minimum essential coverage (MEC) or pay excise tax Individual Penalty 2014: Greater of $95 or 1% of income 2015: Greater of $325 or 2% of income 2016: Greater of $695 or 2.5% of income Max: National average Bronze Plan premium Indexed after 2016 Children under 18: ½ of adult amounts (above) Family penalty limited to 3 x dollar amount for individual 42

43 Individual Mandate Exemptions Religious objection to insurance Health care sharing ministries Incarceration Undocumented aliens Indian tribes Low income: below $9,350 (single) or $18,700 (married, filing jointly) Short gaps in coverage No access to affordable coverage (8% of MAGI) Hardship 43

44 Minimum Essential Coverage Government coverage Medicare, Medicaid, CHIP*, TRICARE and veterans coverage Employer-sponsored coverage HealthFlex and other annual conference health plans are minimum essential coverage Individual market plans Exchange plans and private market plans Other health benefit plans recognized by HHS E.g., student health plans, foreign health service, Medicare Advantage plans, state high-risk pools * CHIP Children s Health Insurance Program 44

45 Stay Tuned Exchange Notice Guidance More about HRAs Reporting employees covered to IRS Exchange plan premiums W-2 reporting for church plans Nondiscrimination Rule (Code 105(h) Important to clergy versus lay benefits 45

46 Pay or Play Rule Large employer averages 50 or more full-time equivalent employees (FTEE) Large employer must provide affordable coverage with minimum value to full-time employees or else pay penalty Must offer coverage to dependent children (to age 26) Not required to offer coverage to employee s spouse Should not apply to most churches 46

47 Pay or Play Rule Counting employees Full-time: 30 hours per week (130 hours per month) Part-time employees (PTEs) are counted to determine whether employer is subject to the pay or play rule Aggregate hours of PTEs 130 Employees on paid leaves are counted (vacation, jury duty, disability and leaves of absence) Seasonal employees may be excluded (less than 120 days per year) Variable-hour employees Look-back and stability periods to assess whether FTE 47

48 Employer Aggregation Controlled group rules Code 414(c) apply Rules generally lump together closely affiliated employers Tax-exempt organizations Common control (80% shared board members) Uncertainty about how applies to churches and QCCOs Pay or Play Rule: good faith standard for churches IRS Notice 89-23: 80% shared directors, and one employer provides 80% of operating funds of another (and there is a degree of common management) 48

49 Pay or Play Penalty If employer offers no coverage and at least one full-time employee (FTE) qualifies for PTC Penalty: $2,000 per FTE (excluding the first 30 FTEs) If employer offers coverage and at least one (even if only one) FTE qualifies for a PTC Penalty: $3,000 per FTE receiving a PTC (limited to no coverage penalty) Penalties adjusted for inflation after 2014 Part-time employees (PTEs) count toward determining applicability of penalty but not penalty accrued 49

50 Are you a large employer? at least 50 FT equivalent workers Including FT (30+ hours/week) and PT workers (prorated) Excluding seasonal workers (up to 120 days per year) Are any of your FT employees receiving PTC for exchange coverage? Do you have more than 30 FT employees? No Penalty Do you provide health insurance? Pay monthly penalty, lesser of: 1/12 x $2,000 x (number of FT employees 30) 1/12 x $3,000 x (number of FT employees receiving credits for exchange coverage) Pay monthly penalty 1/12 x $2,000 x (number of FT employees 30)

51 Employer of UMC Clergy? Clergy are self-employed for FICA/SECA purposes Tax Court case: Weber v. Commissioner UMC clergy are employees for income tax purposes Applied common law standard Many factors of common law test point to local church Church Alliance Comment Letter (March 18, 2013) to Employer Shared Responsibility Rule Seeks application of Pay or Play Rule at local level Urges good faith standard) 51

52 Employer of UMC Clergy? Local church Place of work, supplies, parsonage/housing, withholding and W-2, compensation, pays for health coverage, SPRC oversight Charge conference Determines compensation Annual conference Appointment, leaves, removal, superintendent oversight 52

53 Typical Local Church Small employer: 3 FTEs 1 full-time clergy 1 full-time lay employee, 2 part-time lay employees Covers clergy in conference plan and FTE in a local Blue Cross plan; does not cover part-time employees If offer no coverage Penalty = $0 (exempt from penalty) If offer coverage Annual premium = $16,000 Potential savings: $16,000 53

54 Church Considerations Clergy may view negatively May pay more for coverage, especially if church currently pays 100% of clergy s premium Exchange plan may be viewed as inferior Mandatory vs. voluntary conference health plan Appointment concern for clergy and cabinets Exchanges provide guaranteed issue access for part-time employees Exchanges may provide access for uncovered spouses 54

55 Large Local Church 55 FTEs 6 full-time clergy, 4 half-time clergy 30 full-time lay employees, 34 part-time lay employees If offer no coverage Penalty = $12,000 (36*-30 = 6 x $2,000) If offer coverage Annual premium = $350,000 Potential savings: $338,000 * Part-time employees not counted in assessing penalty 55

56 Church Considerations PTEs: Exchanges provide guaranteed issue access Lower-paid employees may be better off Higher-paid employees may not qualify for PTCs on exchanges May reduce church budget savings if salaries must increase (with increased FICA obligations for non-clergy employees) Clergy will pay more SECA on higher salary Clergy may view no coverage negatively May pay more for coverage, especially if church currently pays 100% of premium Exchange plan may be viewed as inferior 56

57 Conference Considerations Median clergy compensation in conference Minimum salary in conference Robustness, popularity and mandatory/voluntary nature of conference health plan State(s) preparedness for or resistance to ACA (exchange status, Medicaid expansion) 57

58 Conference Considerations Local churches needs/desires Participants needs/desires Potential conference savings in health coverage expenses Costs to keep higher-paid clergy whole Appointment frictions Churches with employer plans vs. exchanges Church preference for PTC-eligible clergy 58

59 Plan Sponsor Impact

60 Plan Offering(s) Objectives/ Considerations Align with shifting health care landscape; complement exchanges Optimal platform to manage potentially two separate populations 60

61 Plan Offering(s) Objectives/ Considerations Continue migration toward participant consumerism/responsibility Shift necessary for sustainability or transition Streamline plans/optimal risk pool management/cost efficiencies Avoid future excise (Cadillac Plan) tax impact 61

62 HealthFlex Possible Options Going Forward 2014 Maintain self-insured plans Maintain self-insured plans with private exchange option * Public exchange premium tax credit (PTC) subsidy eligibility applies to Options 1 and 2. May involve some loss of scale to plan 62

63 HealthFlex Possible Options Going Forward 2014 Facilitate employer HRA* direct funding for Options 1 and 2 Center for Health wraparound wellness products for participants in private or public exchanges * HRA: Health reimbursement account (if permissible under regulations) 63

64 2014 Plan Sponsor Options and Considerations Plan Coverage Remain all in current health plan no change Move all in to public exchange Remain in current health plan with public exchange option Potential move to private exchange with public exchange option 64

65 2014 Plan Sponsor Options and Considerations Funding Maintain current contribution structure (premium billing structure) Offer rearranged contribution structure Charging 9.5% or more of MAGI* for participant-only premium (moves some participants to exchanges through affordability test) * MAGI: modified adjusted gross income 65

66 2014 Plan Sponsor Options and Considerations Funding (continued) Salary (taxable) offset for: Everyone at same level Everyone at differing levels based on PTC eligibility (Additional SECA, pension and other costs must be considered) Offer/fund HRA for participants in: Group self-insured plan(s), and Potentially for those in private exchange (if permissible under regulations) 66

67 Key Planning Considerations Income Verification Strongly recommend obtaining customized household income information Premium Cost Sharing Due to affordable coverage requirement, potential consideration for change in cost-sharing strategy 67

68 Key Planning Considerations Appointment/equity issues may persist between PTC-eligible and non-ptc-eligible clergy Sponsor exchange equivalent plan for non-subsidy eligible participants Provide non-subsidy eligible population opportunity for access to HRA* funds subsidy-eligible participants cannot utilize HRAs in the exchanges Pass on blended premium cost to SPUs Funding answer potentially could be: Defined contribution (HRA) nontaxable mechanism, or Through varying taxable compensation or other benefits * HRA Health reimbursement account 68

69 Key Planning Considerations Pay or play consideration for large UMC employers (50+ full-time employees) Offer no coverage $2,000 penalty per FTE* (excluding first 30 FTEs) Offer coverage and at least one (even if only one) FTE qualifies for exchange PTC $3,000 penalty per FTE receiving PTC (limited to no coverage penalty) Potential for a few affected SPUs in each conference * FTE Full-time employee 69

70 Center for Health Supports Plan Sponsor Decision: Non-HealthFlex Executive Summary and Primer HCR Impact Overview PowerPoint (with voiceover) FAQ Planning Considerations Sample communications and household income survey questions Consultations (at cost) 1. HCR Impact Overview 2. Population Analysis Modeling Plan Sponsor Release Form Financial Model Overview (with voiceover) 70

71 Health Care Reform Plan Sponsor Impact Model Overview Three primary sections of Impact Model: Develop distribution of participants by each federal poverty level (FPL) and dependent category estimate potential eligibility for exchange subsidies Determine number of participants by FPL who may be subsidy-eligible due to having unaffordable coverage Illustrate potential impact on plan sponsor s health plan costs under various assumptions 71

72 Section 1 Groupings by FPL Based on Household Income % FPL potentially eligible for subsidies to purchase health coverage through exchanges¹ <138% FPL assumed eligible for Medicaid² Participants above 400% FPL not eligible for subsidies ¹ 138% in states that agree to PPACA s expanded Medicaid program ² Recently, some states indicated they may not expand Medicaid to 138% of FPL 72

73 Section 1 Participants by Federal Poverty Level and Family Tier Table A 2014 Family Tier Est. Family Income Single 1 Dep 2 Deps 3 Deps 4+ Deps Total 100% FPL %-125% FPL %-138% FPL %-150% FPL %-200% FPL %-250% FPL %-300% FPL %-350% FPL %-375% FPL %-400% FPL %-425% FPL %-450% FPL >450% FPL Total Potentially subsidyeligible 73

74 Section 2 Unaffordable Coverage Assumptions Model assumes the following interpretation/assumption: Participants who are potentially subsidy-eligible have unaffordable coverage if: Premium contribution for participant-only coverage is 9.5% or more of family s household income (MAGI), or No employer-sponsored coverage Key Point: Unaffordability is based on premium contribution for participant-only coverage it does not take into account what the employer charges to cover dependents 74

75 Section 2 Employee Premiums Reflecting 9.5% of Income Table B Family Tier Est. Family Income Single 1 Dep 2 Deps 3 Deps 4+ Deps 100% FPL N/A $64 N/A N/A N/A 100%-125% FPL N/A N/A N/A N/A N/A 125%-138% FPL N/A N/A N/A N/A $ %-150% FPL N/A $182 $240 N/A N/A 150%-200% FPL $183 $232 $311 $322 $ %-250% FPL $210 $303 $376 $445 $ %-300% FPL N/A $349 $440 $496 $ %-350% FPL $319 $410 $495 $643 N/A 350%-375% FPL $336 $457 $601 $702 N/A 375%-400% FPL $361 $491 $614 $747 $949 Key Points Participant-only contribution for coverage must be higher than these amounts for participant in each FPL/dependent tier to be subsidy-eligible. Actual premium contributions for participant-plus-dependent coverage would be much higher (i.e., the participant-only share plus additional amounts for dependent coverage). 75

76 Section 2 Table B-2 Table B-1 Reflected as % of HealthFlex Premium Table B-2 Contributions at 9.5% of Income Reflected as Percent of Projected 2014 Participant-Only Premium 2014 Family Tier Est. Family Income Single 1 Dep 2 Deps 3 Deps 4+ Deps Total 100% FPL N/A 5% N/A N/A N/A 6% 100%-125% FPL N/A N/A N/A N/A N/A N/A 125%-138% FPL N/A N/A N/A N/A 17% 30% 138%-150% FPL N/A 13% 14% N/A N/A 20% 150%-200% FPL 25% 17% 18% 18% 25% 30% 200%-250% FPL 28% 22% 21% 25% 31% 34% 250%-300% FPL N/A 25% 25% 28% 35% 36% 300%-350% FPL 43% 29% 28% 36% N/A 39% 350%-375% FPL 46% 33% 34% 40% N/A 41% 375%-400% FPL 49% 35% 35% 42% 54% 50% 2013 HealthFlex Contributions by Tier Represented as Percent of 2013 Premium by Tier HealthFlex Coverage Tier 2013 Percentage Single 1 Dep 2 Deps 3 Deps 4+ Deps Total Current - All Incomes 0% 47% 58% 58% 58% 29% 76

77 Section 3 Impact on Net Plan Sponsor Cost Table F-2 Single 1 Dep 2 Deps 3 Deps 4+ Deps Total E. Estimated 2014 Contributions: No Change $0 $476,107 $161,078 $371,718 $272,593 $1,281,496 F. Estimated 2014 Net Plan Cost: No Change (A. - E.) $513,112 $2,070,142 $115,008 $265,403 $194,629 $3,158,293 Single 1 Dep 2 Deps 3 Deps 4+ Deps Total G. Estimated 2014 Contributions: Remaining $0 $352,319 $131,340 $349,415 $242,856 $1,075,930 H. Estimated 2014 Additional Contributions $112,500 $729,000 $49,500 $126,000 $90,000 $1,107,000 Single 1 Dep 2 Deps 3 Deps 4+ Deps Total I. Additional HRA Cost $169,200 $755,520 $45,360 $105,120 $72,000 $1,147,200 Single 1 Dep 2 Deps 3 Deps 4+ Deps Total J. Total New Combined Cost: $289,933 $1,506,146 $93,478 $231,883 $159,566 $2,281,006 (D. - G. - H. + I.) Estimated % Change in Cost ((J. - F.) F.) -43% -27% -19% -13% -18% -28% F: Current net cost without disenrollment (A minus E) G: Additional cost-sharing borne by participants based on proposed new participant-only contribution amount I: Proposed additional HRA funding provided to participants J: Net plan cost with disenrollment, new contributions and HRA funding 77

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