Health Care ReformWhat should HBAK expect

Barring some unforeseen successful legal challenge, Health Care Reform will take full effect on January 1, 2014.

This will be the most comprehensive reform legislation to affect the country since Social Security.

Health Care Reform- What Now?

Low Risk Mid Point High RiskLow Premium High Premium

Insurance is the spreading of risk among many people to assist a few who have a loss.

In theory, your insurance coverage, be it health, life, auto, home, business will fall somewhere on this continuum

In this model, the low risk/low premium policy is likely paying more than they actually should, and the high risk/high premium policy is likely NOT paying enough for the claims that they generate

How Insurance Works Now

Guaranteed coverage regardless of health status

Community Rating No Pre-existing

condition waiting period

Mandated Health plan coverage’s

Premiums will go UP!

Provisions of Health Care Reform & what they mean for Health Insurance Rates

$150 $450$405$300

Community Rate

These people are happy.These people will be negatively affected by law.

Good Risk Bad Risk

It is estimated that premiums for healthy clients will increase somewhere between 60% to 90% on average as a result of Health Care Reform.

Many employers will look for alternative ways to cover employees or drop coverage and pay a potential penalty

This is what ACA Does to Rates

What will happen?

These are the rates we will have available because we can still “Risk Rate”$150 $450$405$300

Community Rate

These people are happy.These people will be negatively affected by law.

Bad Risk

Establish a Health Insurance Trust to pool resources and employee lives into one large pool to spread the risk of the overall population of our eligible members

Treated as one Single Large Employer, we would avoid some of the risk rating provisions of the act.

This is an employer based group plan. Individuals are not eligible to participate.

Trust Program Solution

 

The health insurance portion of the HBAK Program is provided by Anthem

This is a fully insured program

We do not envision utilizing any “self insured” products as an offering through the trust

Other products such as dental, vision, STD, LTD and Life are available to members

Anthem is our partner

Originated in late 1970’s

Program grew in scope

Currently covers approximately 50,00 lives in Kentucky

Has been a consistent membership recruitment and retention tool

Association Health Insurance Programs

First, the endorsing Trade Association must meet the purpose, operational structure and membership rules described by the Department of Labor to be considered a “bona fide” Association.

We believe you meet those criteria

Requirements

Second, as a “bona fide” Association, you are eligible to offer a group health plan with the following conditions:

◦ It is a “Single Plan”: The Association must be the health plan sponsor and fiduciary, as defined by ERISA and the DOL.

◦ Group Size: The Plan can only be offered to groups of two or more employees. (Pending approval for 1 man groups)

◦ Like-Business or Common industry: The plan must be eligible to like-businesses who are active members of the sponsoring Association

◦ Common renewal date: The Plan needs to act as a “single Plan” and thus, all employers will move to a common anniversary date which for KRMCA will be April 1 of each year.

Requirements

Third, because the Association Health Plan is now considered a “large group”, all other state and federal large‐group provisions apply. Therefore, beginning with the 2013 renewal, all subscribing groups will be eligible for:

◦ State and Federal large group benefits such as autism, MHP and Medicare as secondary payer.

◦ Section 125 services

◦ COBRA services

Requirements

Underwriting Criteria This is employer based coverage, not individual

coverage◦ 75% of eligible employees must have credible coverage◦ 50% of eligible employees must be on the plan◦ Employer must contribute at least 50% of single premium◦ Employer must be a member in good standing of the

association◦ Employer must maintain association membership to

remain eligible