MARKETPLACE MATTERS Producer Prep Program

Transcription

1 MARKETPLACE MATTERS Producer Prep Program This presentation is a high-level summary and for general informational purposes only. The information in this presentation is not comprehensive and does not constitute legal, tax, compliance or other advice or guidance. A Division of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association

2 Training Requirement to Sell Individual In order for a producer to sell Health Insurance Marketplace plans (and receive compensation), a producer must register as an agent/broker with the Centers for Medicare and Medicaid Services (CMS). 1. Producers who are CMS-certified in the Individual Marketplace can sell and receive compensation for both Marketplace retail plans and non-marketplace retail plans. These producers do not have to complete this training deck (Marketplace Matters: Producer Prep Program). You are only required to complete the Marketplace Matters: Product and Pricing training. 2. Producers who are NOT CMS-certified in the Individual Marketplace can only sell and receive compensation for non-marketplace retail plans. If you fall into this category, you need to complete this training deck (Marketplace Matters: Producer Prep Program) as well as the Marketplace Matters: Product and Pricing training and affirm you have done so. 2

3 Plan Type and Market Applicability An Affordable Care Act provision may affect a specific plan type or market, such as grandfathered plans, non-grandfathered plans, the individual market, the small group market and more. Throughout this training, you will see the following yellow and orange box containing the plans and markets affected by a provision. The acronyms are defined below. Because this training is focused on the individual market, those market/plan types are more prominent: INDNGF = Individual non-grandfathered plans INDGF = Individual grandfathered plans We will also note when the provision affects other markets: SMLNGF = Small group non-grandfathered plans SMLGF = Small group grandfathered plans LGFNGF = Large group fully insured non-grandfathered plans LGFGF = Large group fully insured grandfathered plans LGSNGF = Large group self insured non-grandfathered plans LGSGF = Large group self insured grandfathered plans INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF 3

4 Training Topics The Affordable Care Act (ACA) Objectives Guaranteed Coverage & Renewability Rescissions Grandfathered Plans Health Insurance Mandates Rating Rules Pre-Existing Conditions Lifetime & Annual Limits Appeals & External Review Clinical Trials Summary of Benefits and Coverage The Marketplace Enrollment Periods Essential Health Benefits Preventive Services Qualified Health Plans Metallic Plans & Actuarial Value The Federal Poverty Level and ACA Premium Tax Credits for Individuals Cost-sharing Subsidies for Individuals PCORI Risk Mitigation (3Rs) Health Insurer Fee Medical Loss Ratio American Indians & Alaskan Natives Legal Immigrants Medicare, Medicaid & CHIP The Marketplace: Privacy & Security Standards Training Affirmation Form 4

5 The Affordable Care Act (ACA) Objectives

6 ACA Objectives The Affordable Care Act has several broad objectives. It s designed to: expand health insurance coverage improve quality of health care services and increase protection to health care consumers. 6

7 Guaranteed Coverage & Renewability

8 Guaranteed Coverage & Renewals On Jan. 1, 2014, the Affordable Care Act requires coverage to be offered on a guaranteed issue basis and on a guaranteed renewal basis. Guaranteed Coverage (also called guaranteed issue) The requirement that a plan accept every applicant for health coverage, as long as that applicant agrees to the terms and conditions of the insurance offer (such as the premium) Guaranteed Renewals The requirement on a plan to renew individual coverage at the option of the policyholder, or renew group coverage at the option of the plan sponsor (e.g., employer) INDNGF as well as: SMLNGF LGFNGF INDNGF as well as: SMLNGF LGFNGF INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF 8

9 Rescissions

10 Rescissions The Affordable Care Act (ACA) generally prohibits rescissions, or to the retroactive cancellation of medical coverage. Rescissions will still be permitted in cases where the covered individual committed fraud or made an intentional misrepresentation of material fact as prohibited by the terms of the plan. A cancellation of coverage in this case requires 30 days prior notice to the enrollee. The rule provides that any state or federal law that applies to a rescission or cancellation of coverage that is more protective of individuals, beyond the standards established by ACA, would apply in place of the ACA provision. INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF 10

11 Grandfathered Plans

12 Grandfathered Plans Group and individual health care plans that were in effect at the time the Affordable Care Act (ACA) was passed on March 23, 2010, and have provided continuous coverage since then, may be considered grandfathered plans INDGF as well as: SMLGF LGFGF LGSGF Grandfathered plans are exempt from some ACA provisions Grandfathered plans preserve consumers rights to keep the coverage they already had before health reform Certain changes to a grandfathered plan may mean it loses grandfathered status 12

13 Health Insurance Mandate

14 Health Insurance Mandate: Overview Overview Minimum Coverage Requirement Beginning in 2014, most U.S. citizens and legal residents must have and maintain a minimum level of health care coverage (called minimum essential coverage or MEC) or pay a federal tax penalty. Purpose The mandates are designed to expand the number of people who buy insurance and create a larger pool to help fund benefits and keep costs lower for everyone. Individual Mandate or Individual Shared Responsibility This requires most individuals who don t have health insurance to purchase and maintain coverage. INDNGF, INDGF Employer Mandate or Employer Shared Responsibility This mandate requires most businesses with 50+ full-time equivalent employees to offer minimum essential coverage to their employees and their children. Penalty and reporting are delayed until LGFNGF, LGFGF LGSNGF, LGSGF 14

15 Health Insurance Mandate: MEC Minimum Essential Coverage (MEC) A person satisfies the individual mandate if enrolled in one of the following MEC types: An eligible employer-sponsored plan (meets affordability and minimum value requirements) An employer-sponsored retiree health plan A health plan offered in the individual market A government-sponsored program, including coverage under Medicare Part A, Medicaid, the Children's Health Insurance Program (CHIP) and TRICARE Other health benefit coverage that is recognized by HHS, such as a student health plan or a Medicare Advantage plan 15

16 Individual Mandate Individual Exemptions Individual shared responsibility calls for each individual to have minimum essential coverage, qualify for an exemption, or make a payment when filing his or her federal income tax return. Exemptions fall into 8 categories: 1. Those experiencing financial hardship 2. Those with religious objections 3. American Indians 4. Undocumented immigrants 5. Incarcerated individuals 6. Those without coverage for less than three months 7. Those for whom the lowest-cost plan option exceeds 8% of their income 8. Those with incomes below the tax filing threshold (the threshold for those under 65 in 2013 is $10,000 for singles and $20,000 for married couples filing jointly) 16

17 Individual Mandate Financial Hardship Exemption The Marketplace can consider the following circumstances in which a financial hardship exemption may be granted. becomes homeless, has been evicted in the past six months, or is facing eviction or foreclosure has received a shut-off notice from a utility company recently experienced domestic violence or a fire, flood, or other natural or human-caused disaster that resulted in substantial damage to the individual s property filed for bankruptcy in the last 6 months recently experienced the death of a close family member incurred unreimbursed medical expenses in the last 24 months that resulted in substantial debt experienced unexpected increases in essential expenses due to caring for an ill, disabled, or aging family member 17

18 Individual Mandate Penalty Amounts Tax penalties are assessed according to percentage of income or flat fee, whichever is greater, and will be applied on federal income tax returns. Year WHICHEVER IS GREATER Percent of Income Flat Fee Maximum Penalty per Household % of taxable income % of taxable income % of taxable income $95.00 per adult $47.50 per child $ per adult $ per child $ per adult $ per child $285 per household $975 per household $2,085 per household After 2016 the tax will increase annually by cost of living adjustment (COLA) 18

19 Individual Mandate Penalty Examples Below are examples of the individual Mandate Penalty for a single adult, based on annual income. The penalty is either % of income or flat fee, whichever is greater. The circled amount is the penalty in the following situations: Year Annual income of $15,000 Annual income of $20,000 Annual income of $25,000 Annual income of $30, %=$150 or $95 1%=$200 or $95 1%=$250 or $95 * 1%=$300 or $ %=$300 or $325 2%=$400 or $325 2%=$500 or $325 2%=$600 or $ %=$375 or $ %=$500 or $ %=$625 or $ %=$750 or $695 * Though 1%=$300 is more than the flat fee, the maximum penalty per household is $

20 Employer Mandate Employer Shared Responsibility Under the Affordable Care Act, applicable large employers (generally those with 50 or more full-time equivalent employees) may face a potential penalty if they don t do the following: Offer minimum essential health coverage to all or substantially all of its full-time employees and their dependents (children, not spouses) Ensure that the minimum essential coverage offered meets minimum value and employee affordability requirements Minimum Value (MV) A benefit plan meets the MV requirement if the employer is paying at least 60% of covered health care expenses for a typical population Affordability The employer s coverage is deemed affordable if the employee s share of the premium costs for the lowest-cost, self-only plan offered (that meets the MV requirement) does not exceed 9.5% of a full-time employee s household income 20

21 Rating Rules

22 Rating Rules Apply to non-grandfathered individual and non-grandfathered small groups (on/off Marketplace) Rating based on health status is prohibited Rates may only vary by geographic area, based on physical location individual or family coverage tier tobacco use* (1.5:1) age (3:1) INDNGF as well as: SMLNGF * In the small group market, tobacco users can avoid the smoking surcharge if they participate in a wellness program. Wellness programs in the individual market are not yet possible due to other federal requirements. 22

23 Pre-existing Conditions

24 Pre-existing Conditions Since the law passed in March 2010, children under 19 with pre-existing conditions may not be denied coverage On Jan. 1, 2014, health plans cannot impose a pre-existing condition exclusion (deny or limit coverage) on enrollees of ANY age INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF 24

25 Lifetime & Annual Dollar Limits

26 Lifetime & Annual Dollar Limits Lifetime & Annual Dollar Limits: Overview Starting in 2014, plans sold on and off the Health Insurance Marketplace must include certain health benefits that are deemed essential. The minimum package of items and services that must be covered by these plans is generally defined by each state s Essential Health Benefits (EHBs) benchmark plan. Individual non-grandfathered and small group non-grandfathered health plans can t impose lifetime dollar limits or annual dollar limits for innetwork EHBs. Large group plans, self-insured plans and grandfathered plans are not required by ACA to offer EHBs. However, if these plans do offer EHBs, they must be covered without annual dollar limits or lifetime dollar limits. Lifetime and annual dollar limits on EHBs that are covered by all health plans must be removed or converted to visit, frequency or item limits. 26

27 Lifetime & Annual Dollar Limits Annual Dollar Limit on Out-of-pocket (OOP) Expenses for EHBs Limit out-of-pocket member liability for in-network essential health benefits (EHBs) to no more than $6,350 for individual coverage and $12,700 for family coverage for the 2014 plan year INDNGF as well as: SMLNGF LGFNGF, LGFGF LGSNGF, LGSGF Generally, member liability that is considered part of the out-of-pocket maximum includes: Deductibles, coinsurance and copayments for in-network EHBs Any other expenditure required by, or on behalf of, an enrollee for in-network EHBs including out-of-network emergency services Applies to non-grandfathered health plans that cover EHBs including all individual non-grandfathered plans & small group nongrandfathered plans all large group plans that cover EHBs 27

28 Lifetime & Annual Dollar Limits Annual Dollar Limit on Deductibles for EHBs Deductibles for in-network essential health benefits (EHBs) must not exceed $2,000 for individual coverage and $4,000 for family coverage for the 2014 plan year. A health plan may exceed the deductible limit if it cannot reasonably reach a given level of metallic level (actuarial value) coverage without doing so. SMLNGF Lifetime Limits Prohibits group health plans and insurers that offer health insurance coverage from imposing lifetime limits on the dollar value of EHBs INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF 28

29 Appeals & External Review

30 Appeals & External Review Members have the right to appeal health plan decisions. Health plans have to tell members why a claim has been denied and provide information on how that decision can be disputed: Internal Appeals: Health plan can be asked to reconsider its decision. It must review its decision. External Review: If the health plan still denies payment, the law allows members to have an external review. Rights vary per state due to state law INDNGF as well as: SMLNGF LGFNGF LGSNGF 30

31 Appeals & External Review External Review is available when the plan denies treatment based on: medical necessity appropriateness health care setting level of care effectiveness of a covered benefit when the plan determines that the care is experimental rescissions of coverage An external review either upholds the plan's decision or overturns all or some of the plan s decision. The plan must accept this decision. INDNGF as well as: SMLNGF LGFNGF LGSNGF 31

32 Clinical Trials

33 Clinical Trials Health Plan Requirements Requires that if a qualified individual is in an approved clinical trial, the plan may not do any of the following: 1. Deny the individual participation in the clinical trial 2. Deny the coverage of routine patient costs for items and services furnished in connection with the trial 3. Discriminate against the individual on the basis of the individual s participation in such trial INDNGF as well as: SMLNGF LGFNGF LGSNGF 33

34 Summary of Benefits and Coverage

35 Summary of Benefits and Coverage All health insurers are required to provide consumers with a uniform and standardized summary of benefits and coverage (SBC) for their policies. The SBC is intended to provide clear descriptions that may make it easier for people to understand their health insurance coverage The SBC is completed using a government-designed template so the SBC will be consistent for all policies The items in the SBC represent an overview of coverage; they are not an exhaustive list of what is covered or excluded and full terms are located in the policy INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF 35

36 Summary of Benefits and Coverage The summary of benefits and coverage (SBC) will include: What is covered by the plan What is not covered by the plan Coverage examples A website and phone number for customer service and obtaining more information All insurers must provide an SBC to consumers: Upon application At enrollment Annually upon re-enrollment Upon request INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF 36

37 The Marketplace

38 The Marketplace Defined Marketplaces are designed to help people meet the minimum coverage mandate, which requires those who don t receive coverage from employers or the government to buy it from insurance companies, or pay a tax penalty Marketplaces allow consumers and small employers to shop and buy health insurance, called qualified health plans (QHPs), based on price, quality and other factors QHPs are health insurance plans that have been certified to be allowed for purchase on the Marketplace INDNGF as well as: SMLNGF QHPs and the carriers that sell them must meet many criteria to be offered on the Marketplace Exchange and Marketplace are different terms used to describe the same thing. Exchange is used in the actual text of the law. Marketplace is a more user-friendly term recently adopted by federal agencies when communicating with consumers. 38

39 The Marketplace Purpose The Marketplace was designed to: Help enhance competition in the health insurance market by putting insurers on a more equal footing and encouraging competition based more on managing costs and quality of care Implement procedures for certifying, decertifying and recertifying qualified health plans INDNGF as well as: SMLNGF Collect health plan data and provide transparency on claim payments, enrollment, financials and more Help people meet the Affordable Care Act s minimum essential coverage requirement (also called the individual mandate) Provide non-marketing unbiased information to help consumers better understand the options available to them 39

40 The Marketplace Functions 1. Marketplaces will provide competitive online websites for consumers to shop and compare health insurance plans based on price, benefits, services and quality. 2. Marketplaces will allow people to choose, buy and enroll in a selected plan. 3. Marketplaces will determine consumer eligibility for a qualified health plan as well as public programs such as Medicaid and Children s Health Insurance Program (CHIP), and enroll people in these coverage types if eligible. 4. Marketplaces will allow consumers to determine if they are eligible for assistance and estimate the cost of coverage after premium tax credits and other subsidies are applied. 5. Marketplaces will create more of a level playing field of health plans. 6. Marketplaces will assist consumers with a toll-free hotline as well as other avenues for customer service. 7. Marketplaces will provide and grant individual mandate exemptions. INDNGF as well as: SMLNGF 40

41 The Marketplace Functions Summary 7 Inform consumers about individual mandate exemptions Provide assistance & customer service 6 1 Public Marketplaces Execute Risk Mitigation Programs Run websites that allow consumers to shop for qualified health plans 5 2 Help eligible individuals get federal tax credits & subsidies Help consumers and employers choose & enroll in coverage Determine eligibility for a QHP, Medicaid, CHIP & enroll if eligible

42 The Marketplace Models Federally Facilitated Marketplace (FFM) If a state does not submit a blueprint to HHS, or if HHS finds the state is not exchange-ready, HHS will operate a FEDERALLY FACILITATED model for that state. A state can apply to take back operation of the Marketplace in the future. State Partnership Marketplace (SPM) A state may decide to implement a Marketplace operated by both the state and HHS, also called a STATE PARTNERSHIP model where the state and federal government work together to operate its different functions. State-based Marketplace (SBM) A state may choose to establish and operate its Marketplace, which is called a STATE-BASED model. Other Options A state may combine individual and Small Business Health Options Program or maintain them separately. A state may develop multiple Marketplaces, if each serves a distinct area. 42

43 Enrollment Periods

44 Marketplace Enrollment for Individuals 2014 Enrollment Type Enrollment Period October 1, 2013 to March 31, 2014 Open Enrollment Special Enrollment (see next page) Limited Open Enrollment Initial open enrollment: Coverage effective date: Oct. 1 Dec. 15 Jan. 1 Dec. 16 Jan. 15 Feb. 1 Jan. 16 Feb. 15 March 1 Feb. 16 March 15 April 1 March 16 March 31 May 1 60 days after triggering event (individual market) 30 days after triggering event (small group market) 30 days prior to policy end if policy is on noncalendar year 44

45 Marketplace Enrollment for Individuals Triggering Events An individual can use the Special Enrollment if an individual: Loses his/her minimum essential coverage due to events such as death of policy/contract holder; policy/contract holder loses employer-based coverage; loss of coverage from divorce or separation; or loss of Medicaid or Children s Health Insurance Program eligibility. Gains or becomes a dependent (marriage, birth, adoption) Gains citizenship or lawfully present status Becomes eligible or ineligible for premium tax credits or cost-sharing reductions Has access to new qualified health plans due to a permanent move Is unintentionally or mistakenly enrolled due to an error of an officer, employee, or agent of the Marketplace or of HHS Proves that the plan in which he/she is enrolled violated its policy/contract 45

46 Essential Health Benefits

47 Essential Health Benefits Essential Health Benefits (EHBs) are generally services and items in the following 10 benefit categories: Hospitalization Emergency services Laboratory services Maternity and newborn care Mental health, substance abuse disorder services, behavioral health treatment Prescription drugs Habilitative and rehabilitative services and devices Preventive and wellness services and chronic disease management Ambulatory patient services Pediatric services, including oral and vision care 47

48 Essential Health Benefits In 2014, plans sold on and off the Marketplace must include essential health benefits (EHBs) These plans cannot place annual dollar limits or lifetime dollar limits on EHB services INDNGF as well as: SMLNGF We have removed both annual dollar limits and lifetime dollar limits on EHBs for fully insured group plans While we can set up restricted annual limits for self-insured plans upon request, we suggest following our standard approach The minimum package of items and services that must be covered by these plans is generally defined by each state s EHB benchmark plan 48

49 Benchmark Plans EHBs and Benchmark Plans A benchmark plan serves as a state s reference health plan of essential health benefits (EHBs). Each state had to select a health insurance plan currently operating within the state to act as the benchmark plan. States had to select a single benchmark plan. If state s benchmark plan did not cover services and items in all 10 EHB categories, the benchmark plan had to be supplemented by services and items from other benchmark plan options. Default Benchmark If a state did not select a benchmark, then the EHB benchmark defaulted to the largest (by enrollment) small-group plan in the state. INDNGF as well as: SMLNGF 49

50 Preventive Services

51 Preventive Services Requires health plans provide certain preventive health services without cost sharing there is no copay, coinsurance or deductible when using a network provider Preventive services include coverage pertaining to INDNGF as well as: SMLNGF LGFNGF LGSNGF women, such as contraceptives, pap smears and mammograms. Only non-grandfathered individual and small group plans will have to cover maternity care. Plans have some leeway in outlining the frequency, treatment and setting for these services. That means coverage details and limits may vary from plan to plan. Some companies offer preventive services in addition to those required by the Affordable Care Act. In those cases, members may be asked to pay all or part of the cost of these preventive services. 51

52 Preventive Services In-network preventive services are covered at 100%, and the insurer pays the provider. This is an example list only. SERVICES FOR CHILDREN Well-child exams Immunizations Screening tests Preventive treatments SERVICES FOR ADULTS Yearly preventive visit Immunizations General screening tests Cancer screenings Health counseling Men only Women only Pregnant women only EXAMPLES History and physical exam, hearing screening, vision acuity test, developmental & behavioral assessments Measles, mumps, rubella, varicella (chickenpox), influenza (flu) Screening for STIs, obesity screening, lead screening, tuberculin testing Gonorrhea preventive medication for eyes of all newborns EXAMPLES Wellness visits, including height, weight and body mass index (BMI) Hepatitis A and B, influenza (flu), tetanus, diphtheria, pertussis Blood pressure, cholesterol, depression, diabetes, obesity Colorectal cancer Alcohol misuse, obesity, tobacco Abdominal aortic aneurysm screening Well woman visit, screening mammography, cervical cancer screening with pap smear, osteoporosis screening, prescription contraceptives Screenings for anemia, bacteriuria, Rh incompatibility, gestational diabetes 52

53 Qualified Health Plans

54 Qualified Health Plans A qualified health plan (QHP) is a health insurance plan that has been certified to be allowed for purchase on an individual Marketplace and SHOP. QHPs will be sold and administered by private companies. INDNGF as well as: SMLNGF Every QHP will cover a core set of benefits outlined in the state s essential health benefits (EHBs) benchmark plan. HHS established the criteria for how to certify a QHP. Several things must happen. The product must: Get certified by each Marketplace in which it is sold Provide essential health benefits that meet state and federal guidelines Follow established limits on cost sharing (such as deductibles and copayments) Meet provider network adequacy rules 54

55 Qualified Health Plans Carrier Requirements for Offering Marketplace Products In order for a health benefit plan to qualify for sale on the Marketplace, a company or carrier offering that plan must: Maintain licensing and good standing in the state in which the issuer offers health insurance coverage Charge the same premium rate for each qualified health plan (QHP) of the issuer whether the plan is offered through the Marketplace, directly from the issuer or through an agent Comply with the regulations that apply to Marketplaces, and any other requirements that an applicable Marketplace may establish Agree to offer at least one Silver QHP and one Gold QHP plan on the Marketplace Maintain contracts with essential community providers and ensure sufficient provider choice 55

56 Qualified Health Plans Carrier Requirements for Offering Marketplace Products In order for a health benefit plan to qualify for sale on the Marketplace, a company or carrier offering that plan must (continued): Maintain accreditation based on quality and performance Use a uniform enrollment form Use a standard format to present plan information Provide information on quality standards used to measure product performance and report on the following: claims payment policies, enrollment/disenrollment, amount of claims denied, cost-sharing requirements, out-of-network policies and enrollee rights Implement a quality improvement strategy Meet certain marketing requirements 56

57 Metallic Plans & Actuarial Value

58 Metallic Plans & Actuarial Value Starting in 2014, health plans offered through the individual Marketplace and SHOP must fit within four metallic levels of coverage that correspond to plan actuarial value (AV). INDNGF as well as: SMLNGF These four types of metallic plans are: Bronze, Silver, Gold and Platinum. All metallic plans offered in a state must cover at minimum, the package of essential health benefits (EHBs) set by that state s benchmark plan. Each metal level corresponds to an AV, which is the expected percentage of medical expenses shared between the health plan and the member. For example, a Gold plan with an actuarial value of 80% means that the plan will, on average, pay 80% of health care expenses across the population of members, and members will pay the remaining 20% via deductibles, copayments and other cost sharing. 58

59 Metallic Plans & Actuarial Value The key difference between metallic plans is the expected percentage of medical expenses shared between the health plan and the member. Platinum Gold Silver Bronze 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Expected Percentage of Medical Expenses Covered by the Health Plan Expected Percentage of Medical Expenses Covered by the Member 59

60 Metallic Plans & Actuarial Value These metal coverage levels are meant to: Make it easier for consumers to compare plans with similar levels of coverage and make informed choices about health plans. Help consumers navigate choices and associate cost vs. value. Set the minimum amount of coverage needed to fulfill the minimum coverage requirement (individual mandate) and avoid paying penalties. Standardize levels of health insurance in the individual and small group market for both on and off the Marketplace. Metallic Level Insurer Pays* Member Pays* BRONZE: 60% 40% SILVER: 70% 30% GOLD: 80% 20% PLATINUM: 90% 10% * Payment responsibilities don t include premium payments. These numbers represent an approximate percentage of payment responsibility for covered benefits. 60

61 Catastrophic Plans Catastrophic Plans: a Fifth Plan Value Level There is another plan option available for some individuals: the catastrophic plan. Catastrophic plans will have lower premiums to protect against high outof-pocket costs and cover recommended preventive services without cost sharing providing affordable individual coverage options for young adults and people for whom coverage would otherwise be unaffordable. able. Consumers cannot use premium tax credits for catastrophic plans. Who is eligible? Those under the age of 30 Those who can t afford coverage and receive hardship exemptions from the Marketplace INDNGF 61

62 Coverage for Children Qualified health plans offered on the Marketplace at all metal levels of coverage are also available to a child as a child-only policy. Who is eligible? Children are those who have not attained the age of 21 at the beginning of the plan year, but note that a taxpayer cannot include children aged 19 through 20 when determining the taxpayer's premium tax credit eligibility, unless the 19- or 20-year-old fits the criteria for tax-dependent status (for example, the child is a student) 62

63 The Federal Poverty Level and ACA

64 The Federal Poverty Level and ACA The Federal Poverty Level (FPL) FPL amounts are set gross income minimums that HHS determines an individual or a family needs to live. FPL amounts vary each year and are adjusted for inflation. FPL figures prominently into ACA and eligibility via the Marketplace for: Enrolling in public programs such as Children's Health Insurance Program and Medicaid (planned for Federally Facilitated Marketplace and State Partnership Marketplace) Attaining exemption status from purchasing health insurance to avoid a federal tax penalty Receiving premium tax credits and qualifying for cost-sharing subsidies for a Marketplace plan Poverty guidelines are released at the beginning of each year. FPL amounts for 2014 are likely to be released in January or February of

65 The Federal Poverty Level and ACA FPL and ACA Those up to 138% of FPL may be eligible for Medicaid in states that have accepted Medicaid expansion Those between % of FPL may be eligible to receive premium tax credit assistance for health insurance premium payments Those between % of FPL may be eligible to receive a type of cost-sharing subsidy that reduces out-of-pocket maximums (for Silver plans) Those between % of FPL are eligible to receive a type of cost-sharing subsidy that upgrades eligible consumers to a plan with a high actuarial value (for Silver plans) 65

66 The Federal Poverty Level and ACA Federal Poverty Levels Table The household income range of interest for those purchasing Marketplace plans are % of FPL. Those with household incomes of % of FPL may be eligible to receive premium tax credits and cost-sharing subsidies. A family of four with a household income of $94,200 or less may be eligible to receive assistance poverty guidelines for 48 contiguous states and the District of Columbia Size of Family 100% of FPL 150% of FPL 200% of FPL 250% of FPL 300% of FPL 400% of FPL 1 $11,490 $17,235 $22,980 $28,725 $34,470 $45,960 2 $15,510 $23,265 $31,020 $38,775 $46,530 $62,040 3 $19,530 $29,295 $39,060 $48,825 $58,590 $78,120 4 $23,550 $35,325 $47,100 $58,875 $70,650 $94,200 66

67 Premium Tax Credits for Individuals

68 Premium Tax Credits Defined INDNGF A premium tax credit is available based on a household income of % of the federal poverty level (FPL). The tax credit can be applied to any metallic-level Marketplace plan at any metallic level. The premium tax credit helps pay for monthly health insurance premiums. Though the premium tax credit is applied with a federal tax return, it can be advanced to the individual upon enrollment in a Marketplace plan, and it will be based on the individual s income the previous year. The premium tax credit can be applied to a plan at any metallic level: Bronze, Silver, Gold and Platinum. Note that premium tax credits are on a sliding scale. For example, while those at 150% of FPL might receive tax credits that pay for most of their premiums, those near 400% of FPL likely will not. 68

69 Premium Tax Credits Rules Available for eligible individuals who purchase individual coverage on the Marketplaces, with household incomes between % of the FPL INDNGF Applied to the health insurance PREMIUM payments of a plan at any metallic level Can be advanced to the consumer upon enrollment in a Marketplace plan Based on the consumer s income the previous year 69

70 Individuals: Premium Tax Credits Eligibility To be eligible for a premium tax credit, an individual must: INDNGF 1. Be a U.S. citizen or legal resident 2. Have household income between % of the federal poverty level 3. Be enrolled in a Marketplace plan 4. Be included in tax filings to the IRS as an individual, or as a member of a married couple or family with dependents 5. Not be eligible for other affordable coverage, such as Medicaid, Medicare Part A or other types of minimum essential coverage (other than through the individual Health Insurance Marketplace) 6. Not have access to an employer plan that meets minimum essential coverage and is affordable and meets minimum value 70

71 Individuals: Premium Tax Credits How Advanced Premium Tax Credits Work A Marketplace determines premium tax credit eligibility for INDNGF individuals enrolling in a Marketplace qualified health plan (QHP) and seeking financial help based on income and other requirements. Advanced payments are made periodically to the issuer of the QHP in which the individual enrolls. The amount of the premium tax credit is based on the individual s prior year s income tax returns. These amounts are reconciled in the next year when individuals file a tax return. The enrollee is billed the difference between the full premium and the premium tax credit. If a person who is filing taxes has a change in income, and the filer should have received a higher tax credit, the additional credit would be included in the tax refund for the year. Conversely, any excess amount that was overpaid in premium credits would have to be repaid to the federal government as a tax payment. 71

72 Cost-sharing Subsidy for Individuals

73 Cost-sharing Subsidy Defined A cost-sharing subsidy reduces the out-of-pocket costs (deductibles, coinsurance and/or copayments) at the point of service for eligible individuals. It is designed to help eligible consumers at lower incomes by automatically enrolling them in health plans with higher actuarial values. INDNGF Eligibility Has a household income of % of the federal poverty level, based on the consumer s income the previous year Is enrolled in a Silver Marketplace plan Does not have access to other forms of minimum essential coverage such as an employer plan 73

74 Cost-sharing Subsidy Cost-sharing Subsidy Plan Variations INDNGF The subsidy is a financial exchange between the federal government and the health plan. Members are not part of the financial exchange. They will see the higher value of their plan when they qualify. When coupled with a premium tax credit, members receive assistance with their premium payments as well as their outof-pocket costs. Household Income Plan Original Cost Share Member Original Cost Share Plan NEW Cost Share Member NEW Cost Share % of FPL 70% 30% 73% 27% % of FPL 70% 30% 87% 13% % of FPL 70% 30% 94% 6% 74

75 Cost-sharing Subsidy: AV Upgrade How It Works Behind the Scenes INDNGF 1. Issuer/carrier submits to a state Marketplace for approval a standard Silver health insurance plan. It includes three plan variations to meet the statute s three levels of cost-sharing reductions. The plan receives qualified health plan certification. 2. An individual earning 187% of FPL applies for a Silver health plan. 3. The state Marketplace requests an individual's income eligibility from the U.S. Treasury. 4. Treasury determines employer does not provide affordable coverage. The individual is allowed to purchase the Silver plan on the individual Marketplace. 5. A cost-sharing subsidy is available since the individual selected a Silver plan (with an actuarial value of 70%) and has an income at 187% of FPL. The individual is bumped up to a variation of the plan with a new actuarial value of 87%. 6. The individual receives care for a covered Essential Health Benefit. On average, the plan pays the 87% of benefits and the member pays approximately 13% in deductibles, coinsurance and/or copays. 7. The U.S. Treasury sends advanced payments directly to the issuer of the health plan in the amount estimated to cover the cost-sharing reductions associated with the specific Silver plan variation. 8. After the end of the calendar year, the federal government would reconcile the payments. 75

76 Patient-Centered Outcomes Research Institute Fee (PCORI)

77 PCORI Fee As part of ACA, health insurance issuers and sponsors of self-insured group health plans will be assessed an annual fee based on the average number of covered lives to fund patient-centered outcomes research. INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF Generally, the fee will apply to policy years ending on or after Oct. 1, 2012, and before Oct. 1, Fee amount is $1 times the average number of covered lives for plan/policy years ending before 10/01/2013. Fee amount is $2 times the average number of covered lives for plan/policy years ending on or after 10/01/2013, subject to adjustments that include the projected increases in National Health Expenditures. Fee terminates for plan/policy years ending after 09/30/

78 PCORI Fee 1. The IRS did not adopt recommendations that would prevent double counting individuals with coverage under a group health plan through two separate insurance policies (e.g., a single insurer provides separate policies for in-network and for out-of-network services). 2. Sponsor of a group health plan that provides both insured & selffunded coverage can exclude individuals with the insured coverage when reporting the number of covered lives subject to the PCORI fee. 3. Fee does not apply to employee assistance, disease management or wellness programs as long as they do not provide significant medical care or treatment. 4. Fee is applicable to retiree coverage, COBRA coverage and similar state or federal continuation coverage. 5. Special rules for number of lives calculation in the first and last years the fee is in effect. 6. Fee does not permit third-party reporting or payment of the PCORI fee. 78

79 Risk Mitigation (3Rs)

80 Risk Mitigation Overview Risk Mitigation Programs In 2014, three risk mitigation programs go into effect. Together they are often referred to as the 3Rs. They are designed to stabilize premiums in the market when reforms have taken place. 1. Risk Corridors (temporary) 2. Reinsurance (temporary) 3. Risk Adjustment (permanent) 1. Risk Corridors Risk corridors are designed to lessen the pricing risks insurers face when data for potential enrollees is limited. This program will provide a government subsidy if an insurer incurs losses over a certain limit. And if an insurer s gains reach a certain limit, the insurer will pay the government. INDNGF, INDGF as well as: SMLNGF, SMLGF 80

81 Reinsurance 2. Reinsurance Reinsurance is a temporary program that will be in effect during the first three years of the Affordable Care Act s insurance market reforms ( ). INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF Purpose Helps fund temporary reinsurance programs (established under ACA) that would operate in each state from 2014 through Impact The Reinsurance Fee is assessed on health insurers and plan sponsors for self-funded plans. This includes grandfathered and non-grandfathered plans. The Reinsurance Fee is $5.25 per month per enrolled, covered life in States may require additional reinsurance fees. 81

82 Risk Adjustment 3. Risk Adjustment Risk Adjustment is a permanent program that applies to the individual and small group insured markets. INDNGF, INDGF as well as: SMLNGF, SMLGF All health insurance issuers will calculate the risk of their membership using a model provided by the government. States that run their own Marketplace can choose to also run risk adjustment; otherwise the federal government will operate it. The risk adjustment calculation will result in payments between issuers: insurers with lower than average risk will pay insurers with higher than average risk. Risk adjustment applies to the individual and small group markets, on and off the Marketplace, for non-grandfathered plans. 82

83 Health Insurer Fee

84 Health Insurer Fee Beginning in 2014, health insurers will be assessed an annual fee based on the value of health insurance premiums paid in the previous year. Exemptions exist for Medicare supplement plans, self-funded groups, long term care and others. INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF YEAR FEE 2014 $8 billion 2015 $11.3 billion 2016 $11.3 billion 2017 $13.9 billion 2018* $14.3 billion Total through 2020 $87 billion *Aggregate insurer fees will increase by an indexed amount each year after

85 Health Insurer Fee Starting in 2014, the Affordable Care Act will impose a fee on health insurers, called the Health Insurer Fee (sometimes referred to as the Premium Tax), that will apply to U.S. health insurance issuers. After 2018, the insurance fee is equal to the amount of the fee in the preceding year increased by the rate of the insurer's premium growth. Each insurer will be liable for a share of the aggregate fee based on annual net premiums. Companies with a greater market share will be liable for a greater share of the fee. Insurers will pay the fee directly to the Treasury. The fees are not deductible for income tax purposes. Some groups are exempt: Medicare, self-funded groups, long term care and others. 85

86 Medical Loss Ratio

87 Medical Loss Ratio (MLR) Medical Loss Ratio (MLR) is the percentage of insurance premium dollars spent on reimbursement for clinical services or medical expenses and activities to improve health care quality. INDNGF, INDGF as well as: SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF ACA provisions set MLR standards for different markets, as do some state laws. The federal MLR standards for small groups and individuals are 80% The federal MLR standard for large groups is 85% If a health insurer does not meet or exceed the MLR standard, the insurer may have to issue rebates to enrollees. Rebates may include canceled accounts, active during the MLR reporting year for which rebates are owed. 87

88 American Indians & Alaskan Natives

89 American Indians, Alaskan Natives The Affordable Care Act affects American Indians and Alaskan Natives in these ways: 1. More choices for health care coverage Individuals can use services offered through the Indian Health Services (IHS), tribally operated health systems and Urban Indian Health facilities. Individuals can purchase coverage via the Marketplace. Individuals can enroll for coverage via employer s health insurance. Individuals can access coverage through other sources such as Medicare, Medicaid, and the Children s Health Insurance Program if eligible. Tribes and small businesses can purchase insurance for their employees or their members via the Small Business Health Options Program. 2. Value of health services cannot be taxed: The value of health services and benefits from IHS-funded health programs or Tribes will be excluded from an individual s gross income so it cannot be taxed. 89

90 American Indians, Alaskan Natives 3. No Penalty: The Affordable Care Act (ACA) requires most Americans and legal immigrants to have health insurance or face a tax penalty, but American Indians and Alaskan Natives eligible to receive services through IHS may not have to meet this requirement and would not be fined for not having coverage. 4. If household income does not exceed 300% of FPL, roughly $70,650 for a family of four ($88,320 in Alaska) in 2013 American Indians and Alaskan Natives may not have to pay any cost sharing for certain services, regardless of where service was obtained. 5. If household income is greater than 300% of FPL, American Indians and Alaskan Natives may not have to pay cost-sharing for certain services received at an Indian Health Services facility, tribal organization, or urban Indian organization provider, or through referral under contract health services. 6. Indian Health Care Improvement Act Permanent: Through the passage of ACA, the Indian Health Care Improvement Act is reauthorized and permanent. 90

91 Legal Immigrants

92 Legal Immigrants In 2014, lawfully present immigrants may choose to purchase coverage on a Health Insurance Marketplace Legally present immigrants are those who have applied for either a permanent or temporary visa and have been granted authorization to live and/or work in the United States Those not lawfully present are not eligible for premium tax credits or cost-sharing subsidies 92

93 Medicare, Medicaid & CHIP

94 Medicare Recipients The Affordable Care Act affects Medicare recipients. Most Medicare changes impact organizations not individuals though a few do. Medicare members now have preventive care without cost sharing. Preventive services may include flu shots, mammogram screenings and annual doctor wellness visits. The gap in Medicare prescription drug coverage will slowly close under the law. The donut hole for Medicare prescription drug coverage will be eliminated by 2020 lowering costs and reducing out-of-pocket costs. For Medicare, there s a freeze on income-related Part B premiums until The subsidy for Medicare Part D premiums are reduced for those with incomes above $85,000 for an individual and $170,000 for a couple. 94

95 Medicare Advantage Beginning in 2014 Sometimes called Medicare Part C, Medicare Advantage plans do not offer supplemental coverage. They are a private insurance alternative to Original Medicare (Parts A & B), and they must spend no less than 85% of premium on medical services. ACA reduces payments to Medicare Advantage plans; revised payments will be phased in over several years. Beginning in 2014, Medicare Advantage plans receive bonus payments based on 2011 quality ratings from CMS. These payments are meant to create incentives for quality improvements and to encourage beneficiaries to shift to highly-rated plans. The bonus payments essentially redistribute some of these savings to Medicare Advantage plans that qualify for quality-based bonus payments. 95

96 Medicaid and CHIP ACA expanded Medicaid to all individuals under 65 whose annual income is below 138% of FPL. (Though ACA states this limit is 133% of FPL, the CMS disregards the first 5% of income, raising the effective limit to 138% of FPL.) The federal government would cover 100% of the costs of expansion in 2014, with annual reductions each subsequent year. In 2012, the Supreme Court ruled that Medicaid expansion is voluntary by state. Each state must choose whether to implement the expansion. In states that accept Medicaid expansion, Medicaid and the Children s Health Insurance Program will provide coverage for low-income adults and children, with the Marketplace serving individuals with slightly higher incomes. 96

97 Medicaid and CHIP Medicaid and CHIP Eligibility & Enrollment Eligibility rules for all three programs Medicaid, the Children s Health Insurance Program (CHIP) and Marketplace plans will be aligned and enrollment in all three types of coverage will use a single, unified application. Eligibility verification procedures rely mostly on electronic data sources. States have flexibility to determine the usefulness of available data before requesting additional information from applicants. New verification process for states includes the operation of a federal data services Hub that will link states with federal data sources. New process limits renewals to once every 12 months unless the individual reports a change or new data prompts eligibility assessment. Those states that previously covered children through CHIP will continue to receive the enhanced CHIP matching rate. 97

98 The Marketplace: Privacy & Security Standards

99 Privacy Standards Creation, collection, use and disclosure: 1. Where the Marketplace creates or collects personally identifiable information for the purposes of determining eligibility for enrollment in a qualified health plan; determining eligibility for other insurance affordability programs, or determining eligibility for exemptions from the individual responsibility provisions, the Marketplace may only use or disclose such personally identifiable information to the extent such information is necessary to carry out Marketplace functions. 2. The Marketplace may not create, collect, use, or disclose personally identifiable information while the Marketplace is fulfilling its responsibilities. 3. The Marketplace must establish and implement privacy and security standards that are consistent with the following principles: (i) Individual access. Individuals should be provided with a simple and timely means to access and obtain their personally identifiable information in a readable form and format. (ii) Correction. Individuals should be provided with a timely means to dispute the accuracy or integrity of their personally identifiable information and to have erroneous information corrected or to have a dispute documented. (iii) Openness and transparency. There should be openness and transparency about policies, procedures, and technologies that directly affect individuals and/or their personally identifiable information. 99