Health Care Reform: Denial Is Not an Option Penn-Ohio Regional Healthcare Alliance

1. Health Care Reform: Denial Is Not an OptionPenn-Ohio Regional Healthcare Alliance Matt Eyles VP, Public Affairs & Policy February 20, 2013

2. Reform Is Moving Full Steam Ahead 2

3. Agenda / Topics 3 Recent Federal Rules Exchange Update Plan Designs in 2014 Applicability of New Taxes/Fees Employer & Individual Mandate

4. Post-Election Regulatory Tidal Wave 11/20 11/20 11/20 11/20 11/20 11/30 11/30 12/28

5. Many Proposed/Final Rules Yet to Come Not yet proposed Proposed Proposed rule issue – awaiting final

6. Exchange OutlookAs of Feb 18, 2013 WA ME MT ND VT NH MN OR MA WI NY ID CT RI SD MI WY PA NJ IA NE OH DE NV IL IN MD WV UT** VA DC CA CO MO KY KS NC TN OK SC AR Fed = 26.5 State = 17.5 Partner = 7.0 AZ NM GA MS AL LA TX AK FL HI Federally Facilitated **Utah has expressed goal to operate existing small group exchange under state model and individual exchange under federal model . Request is subject to HHS approval/disapproval Planning Partnership Exchange State Exchange

7. Latest Exchange Timelines Federal Activities Still Waiting on: Final Exchange Rules, including federal exchanges (Mar / Apr 2013) Partnership Exchange Deadline Feb 15, 2013 Plan Preview Period in Federal Exchange Aug 2013 Jan 1 Coverage begins Ongoing Regulations and Guidance 2013 2014 Oct 1 AEP open Ongoing Grants to States Choose EHB Benchmark Dec 26, 2012 Start QHP Certification April 2013 Outreach & Education Plan Mar 29, 2013 HHS Consultation May-Aug 2013 Finalize Media Plan Jun 15, 2013 Complete QHP Certification July 31, 2013 State Activities • EHB = Essential Health Benefits • HHS= Health and Human Services

8. SHOP ExchangesSmall Business Health Options Program • Federal Requirements • Exchanges must establish a small business health options program (SHOP) for small businesses in addition to individual exchanges • Separate exchanges; SHOP limited to groups <100** • Minimum requirements for employee choice WV Limited Market, Less Flexibility Large Market, Broad Flexibility • Integrated exchanges; SHOP eligibility expanded to large groups • Broad employee choice options for employers *States can limit SHOP exchanges to employers with up to 50 employee for plan years before January 1, 2016. 8

9. Key SHOP Design Features • *States can limit SHOP exchanges to employers with up to 50 employee for plan years before January 1, 2016. • ** Employee choice is when the qualified employers select a benefit tier and employees may choose any plan within that tier. SHOP exchanges may create alternative enrollment options for employers, and employers may elect to limit employees to just a single plan or permit employees to select plans from multiple benefit tiers

10. SHOP Exchanges Must Offer Employee Choice Option Employee Choice Plan A Platinum Employer Employee Plan B Gold Silver Plan C Bronze Plan D HHS is proposing to allow employers to choose a tier level and permitting employees to choose plans from that tier. They are also taking comments on whether to allow employers to choose the level of coverage and a specific plan for their employees or to allow employees to “buy up” to another level

11. Plan Design FeaturesEssential Health Benefits (EHBs) 10 Mandated Benefit Categories

12. Plan Design Features: Actuarial Value Coverage of EHBs can be offered at four “metallic” levels: • Actuarial Value (AV) • HHS will allow insurers flexibility to determine specific cost sharing as long as overall AV level is met (+/-2%). Platinum – 90% of health care expenses are paid by the plan Gold – 80% of health care expenses are paid by the plan • Cost Sharing • Max $2,000 / $4,000 deductible* • Out-of-pocket max = $12,500** • *Deductible may be higher if cannot comply with metallic level standard • **Estimate based on Health Saving Account limits Silver – 70% of health care expenses are paid by the plan Bronze – 60% of health care expenses are paid by the plan

13. Plan Design FeaturesRules Inside & Outside Exchanges

14. Taxes & FeesTemporary vs. Permanent Temporary Permanent FY2013-19 CY2014 CY2014 CY2014 CY2018 CY2014-16 FY = Fiscal Year (Oct 1 – Sep 30) CY = Calendar Year

15. Putting It All TogetherMajor Reform Impacts for Groups

16. Putting It All TogetherImpact of Federal Taxes/Fees on Annual Premiums *Based on Oliver Wyman study estimates (Oct 31, 2011) **PCORI, Risk Adj, FFE, and Reinsurance Fee based on HHS rules

17. Employer and Individual Mandate • Employer Requirements • As of January 2014, employers >50 FTEs must offer minimum essential coverage (60% AV) that is “affordable” • Premiums cannot exceed 9.5% income or penalties apply in LG • Small employers are exempt whether self- or fully-insured • Self-insured / LG do not have essential health benefits requirement but SG does • Individual Requirements • As of January 2014, individuals must obtain and maintain minimum essential coverage or pay a penalty • Exceptions to the mandate for certain individuals. • For example, if cost of available coverage >8% of income • 3-month grace period during the year, but then penalties are cumulative

18. Employer Mandate Proposed Rule 18

19. Large Group Decisions in 2014 Large Group Employers (>50 employees) face penalties if they do not offer coverage OR if any employee receives a federal premium tax credit or cost sharing subsidy in an Exchange. Yes Yes No No Yes Yes No No

20. Small Group Decisions in 2014Implications for Employees Small group employers (<50 FTE employees) do not face employer penalties even if an employee receives a premium tax credit or cost sharing subsidy in an Exchange. Yes Yes Yes Yes No No No Yes Yes No No Yes No No *Employee may elect to go to exchange for insurance but will not be penalized if they do not.

21. THANK YOU! QUESTIONS?