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Healthcare Reform

Healthcare Reform. Archie Abrams May 2014. Health Plans and Employers. 2012 – 2013 Insurance Reforms. PPACA imposed several significant new requirements effective for plan years in 2012 – 2013. 2012 – 2013 Insurance Reforms.

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Healthcare Reform

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  1. Healthcare Reform Archie Abrams May 2014

  2. Health Plans and Employers

  3. 2012 – 2013 Insurance Reforms PPACA imposed several significant new requirements effective for plan years in 2012 – 2013

  4. 2012 – 2013 Insurance Reforms PPACA imposed several significant new requirements effective for plan years in 2012 – 2013

  5. 2014 Insurance Reforms PPACA imposed several significant new requirements effective for plan years beginning in 2014

  6. 2014 Insurance Reforms PPACA imposed several significant new requirements effective for plan years beginning in 2014

  7. EHBs must be included in Individual and Small Group plans. Essential Health Benefits

  8. What Payments Are Due Under PPACA 5 New Fees/Assessments

  9. Pay or Play – Employer Shared Responsibility

  10. 4980H Introduction EmployerMandate Requireslargeemployers (withat least50 employees) toeither offer minimum essentialcoverageto full-timeemployees (average of 30hoursperweek) andtheir dependentsor pay anexcisetax if at least one full-time employee receivesfederalassistance to purchasehealth coverage on an Exchange. Theexcisetax iseliminated iftheminimumessential coverage is affordableand providesminimumvalue.

  11. 4980H Overview Twopenalties: IRC4980H(a)–“TheBigPenalty” Penaltyfor large employersthat fail to offerminimum essentialcoverage tofull-timeemployeesand their dependentsand at least 1employeereceivestax credit/cost sharingsubsidy $2,000xeveryfull-timeemployee(minus30) IRC4980H(b)– “TheLesserPenalty” Penaltyfor large employersthat offer minimumessential coverage tofull-timeemployeesandtheirdependents, but an employeereceivestax credit/costsharingsubsidy because the coverage is eithernotaffordableor doesnot provideminimumvalue Generally,$3,000xeach full-timeemployeereceiving premiumassistance

  12. 4980H Transitional Issues NEW!No4980H penaltyforall of 2015 foremployerswith<100FTandFTE employeesin2014 NEW!No4980H(a) penaltyif offers   coversto70%ofFTE(and foreachcalendarmonthin from95%) NEW!For2015,4980H(a) dependents) 2015(down penalty  calculatedbyreducingnumberofFT employees by80 (not30)

  13. Health Insurers and Third-Party Administrators (TPA)

  14. 2014 Reform Requirements

  15. 2014 Reform Requirements

  16. New Billing Method for Families On and Off Exchange Composite Rating Member Build Up FAMILY Contract holder $400 Spouse $300 Dependent 1 $100 Dependent 2 $100 Dependent 3 $100 TOTAL FAMILY $1,000 Family $800

  17. Family Premium Calculation Individual & Small Group / On and Off Family #1 Subscriber, 45 $ 400 Spouse, 40 $ 300 Dependent, 12 $ 100 Dependent, 8 $ 100 Dependent, 4 $ 100 TOTAL $1,000 Family #2 Subscriber, 45 $ 400 Spouse, 40 $ 300 Dependent, 12 $ 100 Dependent, 8 $ 100 Dependent, 4 $ 100 Dependent, 2$ 0 TOTAL $1,000 Family #3 Subscriber, 45 $ 400 Spouse, 40 $ 300 Dependent, 12 $ 100 Dependent, 8 $ 100 Dependent, 4 $ 100 Dependent, 2 $ 0 Dependent, 21$ 200 TOTAL $1,200

  18. 2014 Plans … Individual & Small Group

  19. 3R’s Three Risk Mitigation Programs for Insurance Companies Purpose • Protect against effects of adverse selection • Increase competition by lowering costs and providing security around pricing risk • Risk Adjustment • Transitional Reinsurance • Risk Corridors

  20. 3R’s: Transitional Reinsurance Temporary 2014 ─ 2016 Contributions ($63 PMPY) Recoveries Individual Individual Small Group Large Group UW Self Insured Groups

  21. Individuals

  22. Individual Mandate A non-exempt individual must have minimum essential coverage for each month during the taxable year or pay the shared responsibility payment. Minimum essential coverage is defined as: • Government-sponsored program • Employer-sponsored plan • Plan in the individual market • Grandfathered health plan

  23. Individual Mandate

  24. Individual Mandate Exempt Individuals

  25. The Exchange

  26. 2013 Federal Poverty Level 48 Contiguous States & the District of Columbia

  27. HCR Exchange All Exchange products must comply with one of 4 benefit tiers with specified actuarial values • Individual catastrophic products may be offered to individuals under 30 or eligible for certain mandate exemptions • QHP issuer must offer at least one Silver level and one Gold level plan

  28. Consumer 1 • Goes on Exchange website • Uses calculator to estimate subsidy • Chooses a plan • Applies for subsidy Receiving Premium Subsidies 2 • Federal government receives application • Reviews eligibility 5 • Insurer adjusts premium and cost-sharing and charges individual the reduced price 3 • Government informs Exchange and Insurer of subsidy amount (tied to 2ndlowest Silver Plan) 4 • Government sends subsidy directly to insurer on monthly basis

  29. The ExchangeA New Consumer Market

  30. 3-Month Grace PeriodHealth Insurance Marketplace

  31. Small Business Health Options Program (SHOP)

  32. Healthcare Reform Microsite Phase II – Site Enhancements

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