Eugenie Guillot Sales Director Coventry Health Care Public Domain

1. Eugenie Guillot Sales Director Coventry Health Care Public Domain Health Care Reform What You Should Know Introduction 2012 – Recap 2013 and 2014 – FSA Limits – Health Insurance Marketplace – SHOP – Essential Health Benefits – Actuarial Value – Employer Shared Responsibility – ACA Fees & Taxes – Community Rating 2015-2018

2. Coventry Health Care and the Affordable Care Act Coventry Health Care is your partner in navigating health care changes associated with the Affordable Care Act (ACA). We are pleased to partner with the Jefferson Chamber of Commerce to assist business owners in understanding the impact this law will have on their business and employees. Return to Table of Contents

3. Timeline of Changes Affecting Group Commercial Market Cadillac Plan Tax Imposed Large-Group Participation in State Exchanges State Health Choice Compacts Allowed Independent Payment Advisory Board Established Waiting Period Limitation Rules, Employer Coverage Mandate, Health Exchange Established, Essential Health Benefits, Health Benefit Standards, Subsidies for Individuals, Insurance Market Rules, Health and Wellness Rewards, Annual Health Insurance Industry Fee, State Risk Pool Requirement, Transitional Reinsurance Fee, Risk Corridor Program Established, Risk Adjustment Program and Fee, Small-Group Participation in State Exchanges FSA Limits, Partnership Exchange Deadline, Final exchange Rules, PCORI Fee, Electronic Health Transaction Rules Women’s Preventive Services, Medical Loss Ratio (MLR), SBCs, W-2 Reporting 2013 2014 2015 2016 2017 2018 2012 Return to Table of Contents

4. ACA Changes Implemented in 2012 Women’s preventive services Medical Loss Ratio (MLR) Summary of Benefits and Coverage (SBC) Return to Table of Contents

5. For non-grandfathered plans, the following preventive care services are included without cost sharing when received in-network: Women’s Preventive Services • Well-woman visits • Screening for gestational diabetes • Human papillomavirus (HPV) DNA testing for women 30 years and older • Sexually transmitted infection counseling • Human immunodeficiency virus (HIV) screening and counseling • FDA-approved contraception methods and contraceptive counseling (subject to standard medical management and formulary restrictions) • Breastfeeding support, supplies and counseling • Domestic violence screening and counseling Visit www.CHCLA.com for more information on women’s preventive services. Return to Table of Contents

6. Medical Loss Ratio (MLR) Visit www.CHCLA.com for more information on MLR. • Health insurers report MLRs to the federal government by June 1 each year • MLR is the percentage of premiums spent on medical care • If a health insurer does not meet a minimum MLR threshold, a rebate payment is due to policyholders • The MLR threshold is 85% for large groups and 80% for small groups and individual policies • Health insurers must issue rebates by August 1 each year if they do not meet the required threshold in the specified market • MLR reporting will be ongoing Return to Table of Contents

7. Summaries of Benefits and Coverage (SBCs) Visit www.CHCLA.com for more information on SBCs. SBCs include information like deductible amounts and coinsurance and copayment obligations Employer groups must distribute SBCs to participants and beneficiaries If off-renewal plan changes affect SBC information, notification must be provided to members no later than 60 days before the changes take effect Return to Table of Contents

8. ACA Changes to be Implemented in 2013 and 2014 Return to Table of Contents

9. FSA Limits: January 1, 2013 • $2,500 limit imposed on employee contributions to FSAs • Adjustments for inflation in future years • Limit does not include employer contributions Return to Table of Contents

10. The Health Insurance Marketplace • Beginning in 2014, individuals and small businesses with up to 50 employees can purchase insurance through a health insurance marketplace. In 2016 businesses with up to 100 employees can also participate. • In initial year, open enrollment will be six months: October 1, 2013, through March 31, 2014 • In following years, open enrollment will be from October 15 through December 7 • Assistance available for individuals • Premium tax credits • Cost-sharing subsidies Return to Table of Contents

11. Health Insurance Marketplace • The Labor Department recently postponed the deadline for this requirement until late summer or early fall 2013 • The Labor Department is considering: • Providing generic language that employers can use to notify employees • Allowing employers to use a coverage template that will be available on the Marketplace website Employers will be required to notify employees about coverage options available through the Health Insurance Marketplaces. Return to Table of Contents

12. The Health Insurance Marketplace (continued) • States deciding on the establishment of state or federally run marketplaces and their benchmark plans • Creates four levels of coverage • Bronze, Silver, Gold and Platinum • Requires all plans to cover “essential health benefits” • Plus a Catastrophic Plan available to those under age 30 Small-group plan by state’s choice (21) State employee health benefit plan (2) HMO plan (4) Defaulted to small-group plan (state made no choice) (24) Return to Table of Contents

13. Small Business Health Options Program • Small-group participation in health insurance marketplaces • States directed to create Small Business Health Options Program (SHOP Marketplace) • In 2014 and 2015, small businesses with less than 50 employees may participate in the SHOP • In 2016, small businesses with up to 100 employees may purchase coverage through SHOP Return to Table of Contents

14. Essential Health Benefits The ACA requires non-grandfathered small-group and individual plans both inside and outside health insurance marketplaces for plan years beginning on or after January 1, 2014, to cover a set of health services and benefits called the Essential Health Benefits Package. These include: • 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 • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services, including behavioral health treatment Visit www.CHCLA.com for more information on essential health benefits. 14 Return to Table of Contents

15. Actuarial Value Actuarial value: The average percentage a health plan will pay of an enrollee’s health care expenses. The ACA also requires that the EHB package is offered at four levels of coverage: Return to Table of Contents

16. Minimum Value and Affordable Coverage Provisions Minimum value definition: A health plan that covers at least 60% of the total allowed cost of benefits that are expected to be incurred. IRS and HHS have developed a calculator for employers to use to help determine if the coverage they offer their employees meets the definition of minimum value. Affordable coverage definition: When an employee’s share of the premium for employer-provided coverage costs the employee 9.5 percent or less of their wages. Return to Table of Contents

17. Employer Shared ResponsibilityEffective January 1, 2014 Return to Table of Contents

18. Employer Shared Responsibility (continued)Effective January 1, 2014 Visit www.CHCLA.com for more information on issues affecting employers. Return to Table of Contents

19. Taxes/Fees Impacting Premium in 2014 Visit www.CHCLA.comfor more information on issues affecting employers. Return to Table of Contents

20. Community Rating Beginning on January 1, 2014, rates may vary only based on the following: • Whether the plan or coverage covers an individual or family • Rating area • Age • Rate must not vary by more than 3:1 for like individuals of different age who are age 21 and older • Variation in rate must be actuariallyjustified for individuals under age 21, consistent with a uniform age rating curve. A state may use a narrower ratio with approval by CMS. • Tobacco use, except that such rate shall not vary by more than 1.5:1 for like individuals who vary in tobacco usage. A state may use a narrower ratio with approval by CMS. Total premium for a family is determined by adding the premium for each member: Rate for 50-year-old adult who smokes + Rate for 48-year-old adult nonsmoker + Rate for 16-year-old minor Visit www.CHCLA.com for more information on issues affecting employers. Return to Table of Contents

21. ACA Changes to be Implemented 2015-2018 Return to Table of Contents

22. 2015-2018 Changes • Insurance Payment Advisory Board January 15, 2015 • Independent Payment Advisory Board created to submit recommendations to Congress to slow growth in national health expenditures • Recommendations to reduce Medicare spending in 2014 • State health choice compacts allowed January 1, 2016 • States permitted to form health care choice compacts • Allow insurers to sell policies in any participating state Return to Table of Contents

23. 2015-2018 Changes (continued) • Large-group participation in state health insurance marketplace January 1, 2017 • States may allow employers with more than 100 employees to be part of state health insurance marketplace by purchasing coverage through the Exchange • Cadillac excise tax 2018 plan year • A 40 percent excise tax imposed on “Cadillac” health plans when value of coverage exceeds $10,200 for individual and $27,500 for families. Return to Table of Contents

24. Visit www.CHCLA.com for more information on health care reform. The information contained in this presentation does not constitute legal advice. The law changes very rapidly and, accordingly, Coventry recommends that you seek advice from your legal counsel and/or tax advisor as it pertains to you and your business. Nothing that you read or is provided in this document should be used as a substitute for the advice of competent legal counsel.