Health Care Reform - Understanding the ACA Pediatric Essential Health Benefit Presented by: John Lee DC Metro Sales Manager
Agenda About Dominion Dental Services Health Care Reform Overview o When is Your Market Segment Impacted? The Essential Health Benefit o Benchmark Plans What is the Pediatric EHB? Actuarial Value & SADP s o Stand-Alone vs. Embedded Plan Options o Inside the Marketplace o Outside the Marketplace FAQ s Dominion Dental Products and Services 2
About Dominion Dental Services Operational in the states of Delaware, Maryland, Pennsylvania, Virginia, and Washington DC (Mid-Atlantic region) Founded in 1996 by dental plan veterans Currently in excess of 500,000 members Products include DHMO and PPO dental benefits and vision* plans for individuals, groups and associations Members have access to more than 24,000 dentist listings in the Mid-Atlantic (over 200,000 nationally) and a leading national vision network Dental network increase of 30% over the last year Clients include leading health plans, employer groups, municipalities, associations and individuals Positive track record of client and provider satisfaction * Vision plans are underwritten by Avalon Insurance Company (a Dominion affiliate), and are marketed and administered by Dominion Dental Services USA, Inc. 3
Health Care Reform Overview 5
Health Care Reform Overview Patient Protection and Affordable Care Act (PPACA) Signed into law by President Obama on March 23, 2010. Intended to provide available, affordable health care coverage to the vast majority of Americans. Requires most U.S. citizens and legal residents to have health insurance. The Act requires Health Insurance Marketplaces to be set up in each state where individuals and small groups can purchase health insurance and stand-alone dental coverage. One of the 10 minimum Essential Health Benefits (EHB) include pediatric oral care for children under age 19. Employers with fewer than 25 employees are eligible for up to a 50% tax credit in 2014 when the employer contributes 50% or more toward the premium cost of employee medical coverage. 6
Health Insurer Fee (HIF) A fixed-dollar amount assessed to all medical, dental and vision insurers, which is required by Section 9010 of the PPACA and Section 1406 of the Reconciliation Act. A total of $8 billion will be collected in 2014, $11.3 billion in 2015-2016, $13.9 billion in 2017 and $14.3 billion in 2018. After 2018, the fee will increase according to an index based on net premium growth. This fee is being incorporated into 2014 rates (on and off the Exchange), based on the percentage of premium that will be earned in 2014. In 2014, Dominion will pay an estimated 2% of insured premium as a result of the HIF. 7
Will HCR Impact Your Dental Benefits? Groups with 50 or fewer employees If a group renewed it s medical plan early (before 1/1/14), the group was able to bypass the requirement for an additional 12 months and stay on it s current benefits. Example: Group A has a 2/1/14 effective date for medical and dental. Group A renews early with medical for 12/1/13 and does not have to comply with Health Care Reform requirements until 12/1/14. Group A could either keep its dental benefits as-is for its February 1, 2014 renewal date, or renew early and align with the December 1, 2013 medical effective date for administrative ease. Dental carriers could also align dental with medical effective dates for new groups. 8
Will HCR Impact Your Clients Dental Benefits? Groups with 51 or more employees No impact for 2014 Not required to alter dental benefits to comply with Health Care Reform requirements yet Can stay with current dental plan Upon request, the essential pediatric dental coverage can be added to your current plan Essential Health Benefits including pediatric dental coverage will likely extend to groups with 100 or fewer employees in 2016. 9
The confusion around extensions.
The Essential Health Benefit 10
Background on Essential Health Benefits The ACA states that EHB must cover at least the following 10 categories of benefits & services: 1. Ambulatory patient services 2. Emergency services 3. Hospitalization 4. Maternity & newborn care 5. Mental health & substance use disorder services, including behavioral health treatment 6. Prescription drugs 7. Rehabilitative & habilitative services & devices 8. Laboratory services 9. Preventive & wellness services & chronic disease management, & 10. Pediatric services, including oral & vision care 11
State Base-Benchmark Plan Options Each state had the option to choose between either the State CHIP plan or the FEDVIP plan as the benchmark pediatric dental benefit plan States DC, PA Benchmark Plan Federal Employee Dental and Vision Program (FEDVIP) VA, DE, MD Children's Health Insurance Program (CHIP) 12
What is EHB Pediatric Dental Coverage? Coverage includes: Preventive, basic and major care services Medically necessary orthodontics Although all the benchmark benefits must be covered, there is latitude in how the member cost sharing is structured Stand-alone Dental Plans: Out-of-pocket (OOP) maximum o o DC & MD: Plans have a $1,000 OOP maximum per child or $2,000 per family PA, VA & DE: Plans have a $700 OOP maximum per child or $1,400 per family 13
Actuarial Values & SADP s 14
AV Levels of Coverage AV determines a health plan s metal level tier ACA - directs that non-grandfathered individual & small group plans inside & outside the Marketplace meet particular AV targets (or be a catastrophic plan 1 ): o o o o Bronze = 60% AV Silver = 70% AV Gold = 80% AV Platinum = 90% AV Allows for a de minimis range of -/+ 2% points 1 Catastrophic plans are only available for certain eligible individuals 15
Approach for Calculating AV For standard plan designs, health plans will determine AV using an HHS-developed AV calculator o AV Calculator will guarantee plans with the same cost sharing structure will have the same actuarial value (regardless of plan discounts or utilization estimates) If an issuer determines that a material aspect of its plan design cannot be accommodated by the AV Calculator, HHS allows for alternative calculation methods supported by certification from an actuary States will have the option to submit state-specific data sets starting 2015 16
Stand-Alone Dental Plans (SADP) QHPs in an Exchange may omit the pediatric dental EHB if a SADP in that Exchange offers the pediatric dental EHB Outside of the Exchanges, plans may exclude pediatric dental EHB coverage if: o reasonably assured that coverage is only sold to individuals or small groups that can purchase coverage through an Exchange-certified SADP SADPs are allowed a separate out-of-pocket maximum o Required to demonstrate the out-of-pocket maximum is reasonable for pediatric dental EHB State exchanges determine what is a reasonable out-of-pocket maximum 17
AV Standards for Stand-Alone Dental Plans SADP cannot use the AV Calculator Must demonstrate that the plan offers pediatric dental essential heath benefits at: o A low level of coverage 70% o A high level of coverage 85% Allows for a de minimis range of -/+ 2% points Must be certified by an actuary 18
Benefits of Stand-Alone vs. Embedded Dental Immediate access to coverage Several dental plans embedded with medical will not cover the member until they meet their medical deductible Deductibles and OOP maximums are accumulated separately in stand-alone plans Embedded vs. Stand-alone OOP Cost Exam, Cleaning, Full Mouth X-ray & Sealant 300 250 200 150 100 50 0 Member Pays $275 Embedded Member Pays $0 Stand-alone Member Pays Example: Embedded medical plan has a $1,500 deductible applicable to all services and an OOPM of $6,200 Dominion stand-alone PPO has a $100 deductible and a $700 OOPM (VA) Member in embedded plan will not receive dental coverage until OOP medical and dental costs exceeds $1,500 deductible. 19
Benefits of Stand-Alone vs. Embedded Dental Embedded dental coverage may not be as comprehensive as a stand-alone plan. Stand-alone dental plans offer more plan design flexibility to meet the member s needs No network disruption. Embedded dental coverage may call for the use of a different dentist network, which could require the member to change dentists Simple, familiar. SADPs offer coverage in an easy to understand format that members are familiar with. Expertise Primary focus is dental for SADPs. 20
Dental Inside the Public Health Insurance Marketplace 23
Dental Inside the Public Marketplace Pediatric & Adult Benefits Small Groups Enrollees Stand-alone dental adult and/or pediatric benefits can be purchased inside or outside the Marketplace Medical Carriers No requirement to include or offer pediatric dental in medical benefit plans inside the Marketplace if stand-alone dental plans are available Stand-Alone Dental Carriers Pediatric dental benefits must meet a minimum 70% Actuarial Value (Low Option). The High Option is set at 85% Actuarial Value Adult dental can be offered as an optional purchase inside the Marketplace without any minimum plan design requirements 24
Plan Options: Inside the Public Marketplace Dental Option 1 Medical Option 1 Plan With EHB Pediatric Coverage Stay with current plan off the marketplace and cover adults only Dental Option 2 Choose an adult dental plan on or off the marketplace and only cover adults Dental Option 1 (Easy/No Disruption) Important Note: Groups purchasing medical on the Public Marketplace are NOT required to purchase embedded EHB pediatric dental coverage. Medical Option 2 Stay with current plan off the marketplace Plan Without EHB Pediatric Coverage Dental Option 2 Choose a plan on or off the marketplace with or without adult coverage 25
Dental Outside the Public Health Insurance Marketplace 26
Dental Outside the Public Marketplace Pediatric & Adult Benefits Small Groups Enrollees Are required to purchase the EHB pediatric dental benefit either as part of a medical carrier s benefit plan or separately through a stand-alone dental plan Medical Carriers Medical plans are required to include EHB pediatric dental coverage within their medical benefits package The pediatric EHB dental benefit can be withdrawn (except in Maryland) if the medical plan is reasonably assured that an individual has obtained such coverage through an Exchange-certified stand-alone dental plan Stand-Alone Dental Carriers Pediatric dental benefits must meet a minimum 70% Actuarial Value (Low Option). The High Option is set at 85% Actuarial Value Adult dental will be offered as an optional purchase outside the Marketplace without any new plan design requirements 27
Plan Options: Outside the Public Marketplace Dental Option 1 Medical Option 1 Plan With EHB Pediatric Coverage Stay with current plan and cover adults only Medical Option 2 Plan Without EHB Pediatric Coverage* Dental Option 2 Purchase EHB pediatric dental and stay with your current plan and cover adults only Important Note: Groups purchasing medical off the Public Marketplace ARE required to purchase the EHB pediatric dental coverage through a medical or dental plan. * Note: Medical carrier must allow waiver of EHB pediatric dental coverage. 28
Essential Pediatric Dental Benefit FAQ s 29
Top Broker FAQ s 1. What is the rate factor to add Certified Pediatric Coverage? Rates are based on: Plan type County 3x child dependent maximum 2. What is the difference between the Certified Pediatric Coverage offered in the Health Insurance Marketplace (Exchanges) and Dominion s current plan policy toward children? Procedure codes dictated by each state s Dept. of Insurance Generally the same as our current offerings Additional codes are not always considered a material improvement OOP maximums vs. plan benefit maximums 30
Top Broker FAQ s 3. Will annual maximum limits and orthodontic lifetime maximum limits be removed from dental policies in 2014? Yes for certified stand-alone pediatric dental plans The PPACA does not impact adult dental benefit designs PPO plan designs with annual maximum limits and lifetime maximums for orthodontics still available through Dominion (groups >50) 4. If I have a 5-person group and they do not cover any children, do they have to add the pediatric coverage to their plan? A small group is still required to offer certified pediatric coverage However, the subscribers will not use pediatric coverage if they do not have any child dependents under age 19 enrolled The subscribers would essentially not be paying for the pediatric benefit 31
Online Resources www.dominiondental.com/health-care-reform 32
Product Options Dental & Vision Select Plans (Same as a DHMO) - Great Value, Fixed Copayments, Lower Premium Must use participating dentist Comprehensive benefits No pre-existing condition exclusions, waiting periods, deductibles, or maximum dollar limits Least expensive premium No pre-authorization forms, claim forms, or related paperwork Access PPO, POS & EPO Plans Maximum Access, Convenience and Flexibility Larger provider network Flexibility to use any dentist (Access PPO) Lower out-of-pocket costs when using a network dentist Participating dentists will accept benefit assignment Approximately a 25% discount on services Dental ASO Minimum Investment, Maximum Return Claims processing Network access & management Utilization management Member services Administrative support Vision Access to a Leading National Vision Network 34
Commissions Dental & Vision Select Plans (Same as a DHMO) - Great Value, Fixed Copayments, Lower Premium New Group: 10% Group Renewal: 10% New Individual: 8% Renewal Individual: 8% Access PPO Plans Maximum Access, Convenience and Flexibility New Group: 10% Group Renewal: 10% New Individual: 6% Renewal Individual: 6% Discount Plan Fixed Discounts, Lower Premium New Individual: 18% Renewal Individual: 18% Vision Plans Access to a Leading National Vision Network New Group: 10% Group Renewal: 10% New Individual: 6% Renewal Individual: 6% *These commission levels are listed as of 4/1/14. Commission percentages are subject to change. If you have a question about commission levels, contact Dominion Dental directly to request current commission percentages. 34
Why Do Business With Dominion? 1 Member Satisfaction Less than 0.1% of our members called with a service issue. Less than 1% of our members switch between benefit options at renewal. 98% member retention rate. Plan Implementation 96.1% of our groups indicated that their dental benefit implementation was a good-to-excellent experience. Premium Savings Clients pay up to 33% less in premium dollars when a dual-choice dental benefit is offered. 2 Access to Care Dental network growth of over 30% over the last year and growing. Less than 3% network turnover each year. Service Flexible unique products, simple online administration, dedicated sales and service executives, online proposal generation and competitive commissions. 1 Dominion Dental Services, Inc. Internal Performance Report, November 2013. 2 Dominion Dental Services, Inc. based on group premium and enrollment data, 2012. 50
Thank you for your time. Group Service Center gsc@dominiondental.com Phone: 877-559-9624 This document does not constitute legal or tax advice of any kind. It is provided for informational purposes only. Brokers and clients should consult with their legal counsel and tax experts for legal and tax advice. 35