healthcare reform : where are we now ? presented by: joey janssen, employee benefit specialist...

Healthcare Reform: Where are we NOW?

Presented by: Joey Janssen, Employee Benefit SpecialistAugust 23, 2013

“We Make Benefits Work”

“Incredible change happens in your life when you decide to take control of what

you do have power over instead of craving control over what you don't.”

-Steve Maraboli

Change


Quote of the Day – August 22

“Failure to hit the bulls-eye is never the fault of the target”


Current Headlines

• Employer Mandate Delayed until 2015– Individual Mandate still on track

• Out of Pocket Maximum Limits Revised for 2014 – Not delayed

• Exchanges – Still on track??• National Employers & Universities Slash Benefits

– Stating healthcare law (Spouse Coverage) – University of Virginia & UPS


Current Headlines

• Navigator Grants – 67 Million• Recent study from Employee Benefit Advisor

state Navigators are the LEAST likely sources for consultation on the new healthcare law

• Aetna backs out of State-Based Exchanges• The 40 Hour is Full Time Bill – Bipartisan

attempt

Today’s Agenda

• PPACA Highlights• Small Employer Defined• Small Group Deductible Ceiling• Group Rating Factors – Rate Limitations• Pricing Changes & Adjusted Community Rating• Notification of Exchanges


Agenda Continued

• What is a Large Employer?• Full Time Equivalents• Common Ownership• Measurement Periods– PLAN NOW• Pay or Play Mentality--DELAYED• Employer Mandate– DELAYED• Waiting Period Limitations


Individual Mandate• Who?

– All citizens of the United States of America

• What? – Must purchase health insurance

• When?– Beginning Jan 1. 2014

• Why?– The Patient Protection and Affordable Care Act

• How?• What if I don’t comply?

– Additional taxes– 2014- $95 or 1% of your household income over the filing threshold– 2015- $325 per uninsured or 2 % of your household income over the filing threshold– 2016 & beyond- $695 per uninsured person or 2.5% of household income over the filing threshold– WHICHEVER IS GREATER


New Benefit & Coverage RulesEmployer Impacts Description Individual Small Group

Fully InsuredLarge Group Fully Insured

Self-Funded

1 Essential Health Benefits (EHB)

• Health Plans must provide Essential Health Benefits for individual and small group

Yes Yes No No

2OOP Max • OOP limits must comply with OOP

limits for HSA plans• All cost sharing (including copays) for

EHB services must count toward OOPM

Yes Yes Yes Yes

3DeductibleLimits

• Beginning 2014 plan design deductibles may not exceed a $2,000 (self-only) or $4,000 (other than self-only) annual limitation

No Yes No No

4Metallic Levels • Four tiers of coverage for EHB

packages: Bronze, Silver, Gold, and Platinum and catastrophic coverage (under 30-year-olds only)

• Requirement to meet actuarial value of one of four plans

• Requirement in and out of Exchange

Yes Yes No No

5 Pre-existing Condition Exclusion (All Ages)

• Beginning in 2014, pre-existing condition exclusions must be removed for all members, not just those under age 19

Yes Yes Yes Yes


Essential Health Benefits

10 essential health benefits

Pediatric services, including

oral and

vision care

Ambulatorypatientservices Emergency

services

Hospitalization

Maternity and newborn

care

Mental health

and substance

use disorder services

Prescriptiondrugs

Rehabilitative

and rehabilitative services

and devices

Laboratoryservices

Preventive / wellness and

chronic disease

management


Premium Impacts and Pricing

11

Individual Market Premium Increase *

Small Group Market Premium Increase **

Avg Rate Increase10%

Employer Movement2-3%***

Product6 - 10%

Pre-Reform Post-Reform

10%

-5% to +50%


Taxes/Fees3.8%


10%

25% to 200%

Reform Compliance drives significant price increases.

Community Rating causes significant disruption for

many groups.

Many consumers and employers will face substantial price increases

Product3 to 5%


10%

15% to 20%




Avg Rate Increase: 10%

Large Group Premium Increase

Incremental Increase to rates beginning in 2013 to cover taxes,

fees and benefits.

11

Product15 - 30%

Guaranteed Issue and Rating Rules0 - 100%

Community Rating -25% to 25%

Taxes/Fees3.8%

Taxes/Fees3.8%


Small Employer

• In Florida, a small group will continue to be defined as under 50 employees for 2014 and 2015

• In 2016 small groups will be defined as employers with 2-100 employees


Deductible Ceiling

• $2,000 Single / $4,000 Family• What does this mean?• Is this attainable?• Will there be any exceptions?

– Bronze level plans, 60% actuarial value• You could see plans with $5,000 deductibles


Adjusted Community Rating• Adjusted Community Rating will apply to individual and fully

insured small group health insurance• Pricing Restrictions will begin on or after January 1, 2014


Rating Factors & Premium Restrictions

• Geographic Area• Age (3:1 limit)• Tobacco Use (1.5:1 limit)

Group Rate Factors are limited to

• Gender• Health Status• Claims History• Medical Underwriting• Group Size• Industry

Rates may not vary by


Pricing Today and Beginning 2014Additional Rating Factors Being Eliminated or Changed

• Size Factors (eliminated)• Gender differentiation (eliminated)• Typically 10-1 Age slope (changed/reduced)

16

Healthiest or Newest groups and Lowest Rate

Less Healthy or Longest Duration groups and Highest Rate

Current StateHigh

MRRF

Future State MRRF

1.0

Current StateLow

MRRF


Notification of Exchanges

• What is it?• Deadline to comply – October 1, 2013• Who gets them?

– Full-time, part time, variable• Should I send them now or wait?• Where do I find them?


2014 Exchange Options

• Public Exchange for Individuals

• Public Exchange for Small Groups

• Private Exchanges


Public Exchange for Individuals (Marketplace)

• Subsidies available for Individuals:– Under 65– Not Eligible for Employer Coverage

• Or is it not affordable– Not Eligible for Medicaid or Medicare– The high premiums are still there – who pays?

*Subsidies available for those at 100% - 400% of Poverty Level


Public Exchange for Small Groups (SHOP)

• Available in 2014– 2 Plans per metallic level- no competition

• Purchased through an agent• 50% Tax Credit Available for Employers:

– <25 Employees– Average Annual Wage <50K– Contribution at least 50% of EE Premium


Private Exchanges

• Similar to public exchanges, except:– NO Subsidies or Tax Credits Available!– NOT operated by the government, but Insurance

Carriers and Agencies!


New Waiting Period Guidelines

• Waiting periods for Full Time employees cannot exceed 90 days– 90 Days first of month no longer a compliant

option.


Adapting to the New World of Healthcare

• How do you think insurance companies will respond?– Innovation?– New Concepts?

• Special Enrollment Periods• Self Insured• Returne of Premium

– Creativity?• Plan Designs• Plan Functionality


Creativity & Change

• United Healthcare– Renewal Dates– Plan Designs– “Private” Exchanges– Return of Premium

• Aetna– New Business– Existing Business– Private Exchanges


Small Business Options

Today• Offer Employer Sponsored

Health Insurance • Don’t Offer Employer

Sponsored Insurance ( No Penalty)

January 1, 2014• Offer Employer Sponsored

Health Insurance • Don’t Offer Employer

Sponsored Insurance ( No Penalty)

Offering Employer sponsored benefits may look different than it does today but will still be a viable

way to provide value to your employees


Small Group – What To Consider Doing Now?

• Consider renewing 12/01 – WHY??• Consider return of premium programs

Large Group Discussion

• What is a Large Employer?• Full Time Equivalents• Common Ownership• Measurement Periods– Plan NOW• Pay or Play Mentality-- Delayed• Employer Mandate-- Delayed• Waiting Period Limitations


What is a Large Employer?

• A large employer is defined as a company that has greater than 50 full time equivalents.


Full-Time Equivalents

• Why are FTE’s important?– This is used to determine whether or not an

employer is qualified as a large employer.– Full Time Employees: 30 hours or more

• How do you calculate FTE’s?– Add together the total # of FTE’s for the month,

plus a number that is equal to the total number hours worked in a month by part time employees, divided by 120


Full Time Equivalent ExampleLarge or Small Employer?

• 46 Full Time Employees• 20 Part Time Employees• # Hours Worked Per PT Employee: 30• Total Number of Hours Worked by PT EE: 600• How many full time employees will this

company have? 51


Common Ownership- Used to determine if you are a large employer- 0-20% ownership

- Rarely found to have common ownership

- 20-50% ownership- Assumed to have no common ownership but the burden to report and show

that it does exist lies with the employer

- 50-80% ownership- Common ownership assumed and the employer must show that it doesn’t

exist

- 80-100% ownership- Common ownership assumed


Why is Common Ownership Important?

• Business 1: 20 Employees• Business 2: 40 Employees• Business 3: 5 Employees• Total Number of Employees: 65


Measurement Periods• We have more than 50 full-time employees so we are subject to the

employer mandate penalties. How do we know which of our employees is considered “full-time” requiring us to pay a penalty if they qualify for premium tax credits at an exchange (if the employee has a variable work schedule or is seasonal)?

• Through the end of 2014, for purposes of the employer mandate penalties, the guidance permits you to use a “look-back measurement period/stability period” safe harbor to determine which of your employees are considered full-time employees. You may use a standard measurement/stability period for ongoing employees, while using a different


Measurement Periods

• Variable Hour Employees – “Reasonably Determine”• Look back period

– 2013 Deadline – July 1• Standard Measurement Periods

– Ongoing Employees

• Initial Measurement Periods– 3, 6, 9 or 12 months

• Stability Periods– Equals the IMP

• Administrative Periods


Large Group Participation & Contribution

• Current: 75% Participation amount eligible employees; 50% of total population

• Current: Minimum 50% contribution• Out of State Employees?• Multiple Carriers?• 2014 and beyond?


Or Mentality

Will I be Subject to Penalties?• Do I have > 50 Full Time

(FTE) Employees?• Is my health plan deemed

affordable? (9.5% threshold)

• Does my health plan meet the minimum 60% actuarial value?– This is related to self insured

plans more than fully insured

How will Penalties be Assessed?

• Do I offer coverage? (Play)– $3,000 penalty per employee

receiving government subsidy.

• Do I cancel all health benefits? (Pay)– $2,000 penalty per employee

(minus 30)


Tax Penalties Continued

$2,000 Penalty• $2,000 will be assessed if

employer sponsor coverage is not offered

• How is this penalty assessed if an employee only works 9 months?

$3,000 Penalty• What is the trigger?• Coverage is deemed

unaffordable – over 9.5% gross

• Employee goes to exchange


W2 Safe Harbor• Under the Form W-2 safe harbor, an employer could

determine affordability by referring to an employee’s wages from that employer. Wages for this purpose would be the amount required to be reported in box 1 of Form W-2

• This rule can help an employer determine their contribution strategy amount.


Contribution Strategy Idea

• 75 Employees• Require employees to pay $250 per month towards

premium or $3,000 annually• ER would only pay penalty on those employees

making under $31,250 AND receiving a subsidy• What about those under $31,250?


New Options for Large GroupFlexibility & Control

• United Healthcare– ASO- Partially Self Funded – Return of Premium– 51+

• Cigna– Proshare (partially self funded)– Share in the savings


What Should You Do Now?

• Create a plan

• Evaluate ALL of your options

• Make a decision that is best for YOUR business


Questions??


healthcare reform : where are we now ? presented by: joey janssen, employee benefit specialist...

Documents