What Tribal Leaders Need to Know About the

Affordable Care Act (ACA) National Indian Health Outreach & Education Initiative

March 11, 2014

1. Impact of the ACA on American Indians and Alaska Natives (AI/ANs)

2. Medicaid Expansion Benefits AI/ANs

3. AI/ANs Can Enroll in Health Plans through the Marketplace or local I/T/U

4. Increased Resources for I/T/Us and CHS Savings

5. Tribal Sponsorship

6. Exemptions for AI/ANs

7. Impact on Tribal Employers

Learn more about

Impact of the ACA on American Indians and Alaska Natives

• On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (ACA)

• The ACA protects the rights of all Americans, including American Indians and Alaska Natives (AI/ANs), to access affordable health care

• More than 32 million people in this country who would otherwise not have health insurance will have access to health coverage

The Health Care Law

Health Care & Federal Trust Responsibility

• Permanent reauthorization of the Indian Health Care Improvement Act

• Strengthens the Indian Health Service and ensures that AI/ANs will be able to continue to receive services from I/T/Us

• Provides special protections for Indians to gain greater access to health coverage

Impact of the ACA on American Indians and Alaska Natives (AI/ANs)

• Expanded Authority for IHS: Reauthorization of the IHCIA allows IHS to modernize its health care delivery systems & permit tribal governments to make technical changes in the future

• Greater Workforce: New resources to increase the number of doctors, nurses and other health care providers in AI/AN communities

Strengthening the Indian Health Service

• Increased Revenue: Third party billing increases funding to IHS that supports both direct care and contract health care services

Medicaid Expansion Benefits American Indians and Alaska

Natives

Medicaid Expansion for Indian Country

• Tribal Leaders must continue to advocate for Medicaid Expansion if their state has not opted to expand

• States have the option to expand Medicaid eligibility to adults ages 19 - 64 with income up to $31,322/yr. for a family of 4, or $39,155/yr. in Alaska*

• Average income of AI/AN households is $35,192**

• Modified Adjusted Gross Income used to determine eligibility

• No premiums or deductibles for AI/ANs who are eligible to and do receive IHS, tribal 638, or urban Indian health services

• No copays for services received from an Indian health care provider or through referral under contract health services

AI/AN Benefit from Medicaid Expansion

*2013 Federal Poverty Level**US Census Bureau, 2012

AI/ANs Can Enroll in Health Plans through the Marketplace

or Local I/T/U

AI/ANs May Apply for Medicaid, Children’s Health Insurance Program (CHIP), or Marketplace plans

Enrollment assistance is available through the Marketplace or local I/T/U

Tax Credits for health plans lower the monthly premiums qualified individuals pay (up to 400% FPL)

Family of four with annual income $23,550* - $94,200*

Zero and Limited Cost Sharing Plan Variations available to members of federally recognized tribes or ANCSA Corporations

AI/AN Can Enroll In Health Plans through the Marketplace or Local I/T/U

*2013 Federal Poverty Level

Members of federally recognized tribes or ANCSA Corporations:

•No out of pocket costs if enrolled in a Zero Cost Sharing Plan Variation (<300% FPL) or Limited Cost Sharing Plan Variation (>300%FPL) for services provided by an I/T/U or through referral by contract health services.

•Special Monthly Enrollment Period and can change their enrollment status in any plan through the Marketplace once a month.

•Eligible for an Exemption from the Shared Responsibility Payment. Note: Exemption is not automatic, application required.

Protections for Indian Country in the Marketplace

300% FPL = individual income of $34,470/yr. and family of four $70,650/yr.

The Application Process

• Online• Phone• Mail• In Person

Supported by Data Services

Hub

Find out more about the Marketplace in your state by visiting healthcare.gov.

Increased Resources for

I/T/Us

Increased Resources for I/T/Us and CHS Savings through AI/AN Enrollment

Tribal Sponsorship of Marketplace Plans

Some tribes are purchasing health insurance (Qualified Health Plans) for some or all of its citizens through the Marketplace. Zero cost sharing plan variation and limited cost sharing plan variation available at different metallic levels.

Tribal Sponsorship of Health Insurance Plans

Plan levels in Marketplace: Bronze, Silver, Gold & Platinum

Plans will vary by: the cost of premium & out of pocket costs. Lower Premium Higher PremiumLower Premium Higher Premium

Higher AV Means Less Cost SharingHigher AV Means Less Cost Sharing

• All insurance plans certified by the Marketplace must:

• Include 10 Essential Health Benefits (EHB)

• Limit cost-sharing deductibles, copayments, and out-

of-pocket maximum amounts

• Offer zero cost sharing plan variation and limited cost sharing plan variations for AI/AN

What are Qualified Health Plans (QHPs)

10 Essential Health Benefits

Ambulatory Patient Services Prescription Drugs

Emergency services Rehabilitative & Habilitative Services and Devices

Hospitalization Laboratory Services

Maternity & Newborn Care Preventive & Wellness Services and Chronic Disease Management

Mental Health & Substance Use Disorder Services, Including Behavioral Health

Treatment

Pediatric Services, including Oral & Vision Care

Benefits of Tribal Sponsorship

• Tribe could purchase the bronze plan (lowest premium) for Tribal citizens.

• Many Tribal citizens will qualify for tax credits (lowers monthly premium) and cost sharing reductions.

• Tax credits available up 400% FPL. Family of four with annual income $23,550* - $94,200*

• Members of federally recognized tribes and ANCSA Corporations may enroll in zero cost sharing plan variation (<300% FPL) or limited cost sharing plan variation (>300% FPL)

• Individuals not eligible for plan variations could qualify for cost sharing reductions if <250% FPL.

• Tribe can bill for services provided to sponsored individuals.• Result: Increased funding to I.H.S. or Tribal clinic, CHS

savings, and more health services for more citizens in the community.

Exemptions for American Indians and Alaska Natives

• Individuals who can afford health insurance but choose not to buy it, must pay a fine known as an individual “shared responsibility payment.”

• In 2014, the fine is $95 per person ($47.50 per child under 18) with maximum of up to $285 per family using this method OR up to 1% of yearly household income, whichever is higher. For 2014, the payment is made through 2014 tax return filing in April 2015.

• In 2015, it is $325 per person or 2% of income; and in 2016, it is $695 per person or 2.5% of income.

How Much is the Fine for Not Having Insurance?

Who Qualifies for an Exemption from the Fine?

Members of federally recognized tribes or ANCSA Corporations; or individuals eligible for services from an Indian health care provider.

Individuals/families where the lowest-priced coverage available would cost more than 8% of the household income.

Individuals uninsured for less than 3 months of the year.

Individuals who do not have to file a tax return because their income is too low.

If other other circumstances apply. See healthcare.gov/exemptions/ for other exemptions.

• Members of federally recognized tribes and ANCSA Corporations

• May apply for the exemption through the Marketplace; OR

• May claim the exemption when they file their 2014 taxes (due April 15, 2015).

• Individuals eligible to receive services through an Indian health care provider

• May only apply for the exemption through the Marketplace.

• Once you receive the exemption, you don’t have to apply again unless your circumstances change (i.e., no longer enrolled or not eligible for services).

How do AI/ANs Claim the Exemption?

AI/AN Exemption Application

• Available at: http://marketplace.cms.gov/getofficialresources/publications-and-articles/tribal-exemption.pdf

• Covers both types of AI/AN exemptions.• One application can be used for the tax household.• Instructions for the Application will be available soon.

What is Needed to Apply?

• Required documentation to apply:• Documents showing tribal membership or

eligibility for services from the I.H.S., a tribal health care provider or an urban Indian health care provider.

• Social security numbers• Information about people in your tax

household

Application Process

• Complete and sign the application. • Mail the application with the required

documents to address provided. • Per application, applicant will receive a

response within 1-2 weeks if more information is needed.

• If exemption is approved, applicant will receive a certificate of exemption number for filing of tax return.

Impact of ACA on Tribal Employers

Tribal Employer Opportunities & Requirements

ACA Employer Provisions At-A-Glance

ACA Provisions Number of employees

1 to 24 25 to 49 50 to 99 100-200 > 200

Small Business Health Care Tax Credit X

Small Business Health Options Program (SHOP) X X

(up to 50)

IRS Assessable Payments & Reporting

X(transition relief

in 2015)

X X

Why is this Important for Tribes?

• If a Tribe is considered a “large employer,” it may incur an assessable payment for not offering health insurance.

• Tribes may be eligible to purchase health insurance through the Small Business Health Options Program (SHOP).

• Tribes can strategize to meet ACA employer requirements in a cost effective manner.

Small Tribal Employer Opportunity

What is SHOP?• SHOP = Small Business Health Options Program • Designed to help small businesses purchase health insurance

for employees.• Allows an employer to compare plans based on price, coverage

and quality.• Employers eligible if ≤ 50 employees (see next slide).

• In 2016, will increase to ≤ 100 employees.

• Tribes and Tribal entities are eligible to participate.• To find our more about the Marketplace in your State, visit:

https://www.healthcare.gov/marketplace/shop/.

Employer Eligibility Criteria

Generally, an employer is eligible to participate in SHOP if the employer:(1) Is a small employer on business days during the prior calendar year and who employs at least one employee on first day of the plan year; (2)Elects to offer all full-time employees coverage in a plan through a SHOP; and(3)Has its principal place of business address in the Exchange and offers coverage to all full-time employees through that SHOP; OR offers coverage to each eligible employee through the SHOP serving that employee’s primary worksite (in this case, the employer participates in multiple SHOPs).

Small Tribal Non-Profit Employer Opportunity

Small Business Health Care Tax Credit

• Qualify if 1 to 24 full-time equivalent employees.

• Per IRS Guidance, an agency or instrumentality of an Indian tribal government is not eligible for the tax credit unless it is a 501(c)(3).

• Other Tribally owned entities may be eligible for the tax credit (e.g., an entity organized under State law).

Eligibility for the Tax Credit

A small employer may qualify for a tax credit if the small employer meets all of these requirements:

1. Fewer than 25 full-time equivalent employees (FTEs);

2. Pays an average annual wage of less than $50,000 per year per FTE; and

3. Pays for at least 50% of the cost of health insurance coverage for each of its employees.

About the Tax Credit• The tax credit is a percentage of premiums paid by employer.• Percent is sliding scale based on employer size and average

wage.• Beginning January 1, 2014, maximum credit is:

• 50% for small business employers • 35% for small tax-exempt employers

• The maximum credit is available to employers with ≤ 10 FTE employees and average annual wages of $25,000.

• In 2014, the credit will only be available for employers that purchase insurance coverage through a SHOP.

• The employer can only receive the credit for 2 consecutive years (beginning in 2014).

Large Tribal Employer Requirement

Employer Shared Responsibility Mandate• Employer Shared Responsibility Mandate provisions

(i.e., assessable payments): • Applicable to employers with > 50 full-time

employees, including full-time equivalent employees. • In 2015, transition relief for employers with 50 to 99 full-

time employees (certification required).

• Final regulations issued on February 12, 2014.• Delayed to 2015 (IRS Notice 2013-45).

What is the Mandate?

• The Employer Shared Responsibility mandate means that an employer will be subject to an “Assessable Payment” or “Shared Responsibility Payment” for not offering health insurance coverage that is affordable or that does not provide minimum value to its full-time employees and their dependents.

How the Mandate Applies to Tribes• Tribal governments and subdivisions of Tribal

governments are not exempt.• The rules specific to governmental entities (which includes

Tribal governments and subdivisions of Tribal governments) have not been issued by the IRS.

• All Tribal entities will have to comply with these provisions to avoid Assessable Payments.• Tribal businesses, organizations and all other entities such as

casinos, retail businesses, health centers, nursing homes and non-profit organizations.

• See 26 U.S.C. § 4980H, 78 Fed. Reg. 218, and 79 Fed Reg. 8544.

Determining Large Employer Status• Many employers will know they are a large employer

without having to count their full-time employees. • Number of full-time employees (average of 30 hours

of service per week) and full-time equivalent employees (FTEs) are counted. • A specific method must be used to count hours of service for hourly and

non-hourly employees.

• Large employer status determined in current year for following calendar year. • Transition Relief in 2015: Employers close to threshold may use a one-

time period of six consecutive months to determine large employer status.

Steps to Determine Large Employer Status

1. Calculate the number of full-time employees (including seasonal workers) for each calendar month in the prior year.

2. Calculate the number of full-time equivalent employees (including seasonal workers) for each calendar month in the prior year.• Full-time equivalent employees = Add the total number of hours of service of

part-time employees in a calendar month and divide by 120.

3. Add the number of full-time employees and full-time equivalent employees for each month of the calendar year.

4. Add up the 12 monthly numbers and divide by 12.

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Steps to Determine Large Employer Status (continued)

•The Result• If the result is less than 50, the employer is not a large employer.

• If the result is 50 or more, the employer is a large employer. • Employer may not be considered a large employer if the Seasonal Worker

Exception applies.

Seasonal Worker Exception

An employer may not be considered a large employer if:

• The employer’s work force only exceeds 50 full-time employees for 120 days or less during the calendar year; and

• The employees in excess of 50 who were employed during that 120 day period or less were seasonal workers.

Definition of Seasonal Worker

• Seasonal worker = “…a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including (but not limited to) workers covered by 29 CFR 500.20(s)(1), and retail workers employed exclusively during holiday seasons.” 79 Fed. Reg. 8581.

• Employers may use a good faith interpretation of seasonal worker under DOL Regulations 29 CFR 500.20(s)(1).

• Per IRS guidance:• The 120-period may be applied using four calendar months (whether or

not consecutive) or a period of 120 days (whether or not consecutive).• Not limited to agricultural or retail workers.

Transition Relief for Employers with Fewer than 100 Full-Time Employees in 2015An employer must satisfy these conditions:(1) Employs 50 to 99 full-time employees (including FTEs) on business days during 2014.(2) Does not reduce its workforce or overall hours of service of its employees between 2/9/14 to 12/31/14 in order to satisfy the workforce size condition (except if for a bona fide business reason). (3) During “coverage maintenance period,” does not eliminate or materially reduce the health coverage it offered as of 2/9/14 . (4) Certifies that it meets conditions (1) to (3) on a prescribed form.

Two Ways to Identify Full-Time Employees

• Two ways to identify full-time employees:(1) Monthly Measurement Method; or(2) Optional Look Back Measurement Method.

• Employers identify full-time employees in 2014 and offer coverage in 2015.

• Large Tribal Employers need to start planning now to determine what method they will use.

Companies with a Common Owner• Parent corporations and subsidiaries• To determine large employer status, total the number

of all full-time employees (including full-time equivalent employees) working at all companies.

• If the total number of employees is at least 50 full-time employees, then each separate company is considered a large employer.• Even if each separate company employs less than 50 full-time

employees.

To Avoid Assessable Payments• A large employer must offer to its full-time employees

and their dependents the opportunity to enroll in health insurance coverage:• That provides Minimum Essential Coverage under an Eligible

Employer-Sponsored Plan; • That is Affordable; and • That provides Minimum Value.

• If offered, a full-time employee would not be eligible for a premium tax credit or cost sharing reduction.

• The assessable payment is triggered by the employee’s receipt of a tax credit or cost sharing reduction.

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Plan, Affordability & Minimum ValueRequirement Explanation

Eligible Employer Sponsored Plan

(1) Group health insurance coverage offered by, or on behalf of, an employer to the employee that is either:

-- a governmental plan within the meaning of section 2791(d)(8) of the Public Health Service Act (PHS Act) (42 U.S.C. 300gg–91(d)(8)) (e.g., FEHB Program), -- any other plan or coverage offered in the small or large group market within a State, or -- a grandfathered health plan, as defined in section 5000A(f)(1)(D), offered in a group market;

(2) Self-insured group health plan under which coverage is offered by, or on behalf of, an employer to the employee.

Affordable “Employee only” contribution towards the premium is < 9.5% of the employee’s household income. Note: Safe Harbors available.

Minimum Value (MV)

Plan has to cover at least 60% of the total allowed cost of benefits that are expected to be incurred under the plan. MV calculator at: http://www.cciio.cms.gov/resources/regulations/index.html#pm.

How Assessable Payments Can Be IncurredIf a large employer:

(1) Does not offer coverage to at least 70% (in 2016, 95%) of its full-time employees (and their dependents*), OR

(2) Offers coverage to at least 70% (in 2016, 95%) of its full-time employees (and their dependents*) but the coverage is not affordable or does not provide minimum value;

AND at least one full-time employee receives a premium tax credit or cost sharing reduction in the Marketplace.

*If dependent coverage transition relief does not apply.

Assessable Payments in 2015Types: (1) Employer Does Not Offer Coverage

or Offers Coverage to Less Than 70% (in 2016, 95%) of Full-Time Employees*

(2) Employer Offers Coverage to at least 70% (in 2016, 95%) of Full-Time Employees* but Coverage is Not Affordable or Does Not Provide Minimum Value.

Calculation

(1/12=assessed monthly)

1/12 of $2,000 per full-time employee, not including the first 80 employees (in 2016, 30 employees)

1/12 of $3,000 per employee

Dollar Amount Approximately $166.67 per employee, per month X number of employees > 80.

$250.00 per employee, per month.

*Assessable payment triggered by a full-time employee receiving a premium tax credit or cost sharing reduction in the Marketplace.

Assessable Payments in 2016 and ForwardTypes: (1) Employer Does Not Offer Coverage

or Offers Coverage to Less Than 95% of Full-Time Employees*

(2) Employer Offers Coverage to at least 95% of Full-Time Employees* but Coverage is Not Affordable or Does Not Provide Minimum Value.

Calculation

(1/12=assessed monthly)

1/12 of $2,000 per full-time employee, not including the first 30 employees

1/12 of $3,000 per employee

Dollar Amount Approximately $166.67 per employee, per month X number of employees > 30

$250.00 per employee, per month

*Assessable payment triggered by a full-time employee receiving a premium tax credit or cost sharing reduction in the Marketplace.

Employees with Access to Coverage•Employees with access to an eligible-employer sponsored plan that is affordable and that provides minimum value cannot obtain a premium tax credit or cost sharing reduction in a Marketplace.

1. The ACA provides an opportunity to improve the health of all American Indians/Alaska Natives.

2. Medicaid Expansion benefits AI/ANs and tribal leaders must continue to advocate for expansion.

3. AI/ANs can enroll in health plans through the Marketplace or their local I/T/U.

4. The ACA increases resources for I/T/Us through billing and CHS Savings.

5. Tribal Sponsorship of plans provides another opportunity to increase funding to I/T/Us.

6. AI/AN exemption from the Shared Responsibility Payment is not automatic and Tribal citizens will need to apply for the exemption.

7. Large tribal employers need to start planning now to meet 2015 ACA requirements.

Key Points to Remember

With generous support from the Indian Health Service