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HealthCare Reform (PPACA)

HealthCare Reform (PPACA). Employer Mandate. Employees are impacted by Employer decision to offer healthcare – Employee enrolling in non-compliant plan faces penalty Employer offering compliant plan voids employee chance for subsidy

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HealthCare Reform (PPACA)

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  1. HealthCare Reform (PPACA)

  2. Employer Mandate Employees are impacted by Employer decision to offer healthcare – • Employee enrolling in non-compliant plan faces penalty • Employer offering compliant plan voids employee chance for subsidy • If Employer wants to offer compliant plan for employees, they need to meet two provisions of Employer Mandate: • Affordability • Actuarial Value

  3. Affordability Rule: An employee cannot pay more than 9.5% of their household income for health insurance • Safe Harbor • Employee only coverage • Employee’s W-2 earnings Example: An employee earning $11.50 an hour ($23,920 annually) cannot pay more than $190 per month; $23,920 x 9.5% ÷ 12

  4. Actuarial Value Rule: The health plan must cover at least 60% of the actual cost of healthcare • Combination of co-pays, deductibles, co-insurance, out-of-pocket maximums and drugs • Out-of-pocket maximums cannot exceed $6,350 per individual and $12,700 per family

  5. How Many Employees? Full time employee is any employee working at least 30 hours per week FTEE is calculated by aggregating all part-time hours for a month and dividing by 120 FTE = “above/below” 50?? Subject to change

  6. Transition Period • When does your plan have to be compliant for your employees to avoid having to pay a penalty? • Employers< 50 employees have until their plan renews in 2014 • Employers> 50 employees have until January 1, 2016 – REVISED February 2014

  7. Employers < 50 EmployeesProvided by UHC • Transition Period • Early renewals, December 1 • Delay impact of HCR until 2014 • Non compliant plans will not be offered in 2014

  8. Community RatingProvided by UHC Currently groups are evaluated by: • age, sex, zip code, plan design and then adjusted by risk • 5:1 age band Community rating eliminates: • gender and risk adjustment • 3:1 age band Increases of 30% or more predicted

  9. Employers < 50 Employees 2014 Expectations • Community Rating • Plan Compliance • Individual Age Rates • Projected 2014 Rate Adjustments • 40 groups • Predominantly two carriers • Average projected increase 62%

  10. Employers> 50 Employees • Pay or Play delayed until 2016 • Reporting delayed until January of 2015 • No transition period (could change)

  11. Federal Health Exchange Notice • Delivered to employees by October 1 • No penalty if not delivered, but…. • Must state if plan meets actuarial value of at least 60% • Most will leave page three blank • Must be provided to new hires going forward

  12. Health Exchanges in NC • Federally run virtual marketplace where individuals can purchase health insurance for themselves and their families • State Based Model • Partnership Model • Full Federally Facilitated Model • Open enrollment is October 1, 2013 thru March 31, 2014

  13. Health Exchanges in NC • NC and SC are Federally Run Exchanges • Carriers • BCBSNC • Coventry • 55 plan designs offered • Plans offered will vary by zip code • Individuals will only see what is available to them

  14. Plan Characteristics • Co-pays, deductibles, etc. accumulate to out of pocket maximum • Wellness covered at 100% • 5 tier Rx plans, generic to have two levels • Pediatric Vision • Routine eye exam • One pair eyeglasses w/ frame or contacts

  15. Metal Plans Platinum • 90% Actuarial Value • Low co-pays • Low out of pocket Gold • 80% Actuarial Value • Low co-pays • High out of pocket Silver • 70% Actuarial Value • Co-pays available • Max out of pocket Bronze • 60% Actuarial Value • Some Co-pays/H.S.A. Plans • Max out of pocket

  16. Plan Designs BCBSNC • Offer variety of plans including traditional PPO, HSA’s and limited network plans • 2 Platinum, 5 Gold, 11 Silver, 6 Bronze, 2 Catastrophic Coventry • 1 Gold, 1 Silver, 2 Bronze, 1 Catastrophic • Big emphasis on limited network plans in Charlotte and surrounding area, lowest cost

  17. Federal Subsidies • Individuals with no access to a compliant group plan are eligible • Individuals with household incomes from 100% to 400% of the Federal Poverty level are eligible • Thresholds: • $46,000 for individuals • $94,250 for family of four

  18. Federal Subsidies Individuals with incomes less than $23,000 and families of four with less than $47,000 could be eligible for plans that cost $0 Individuals that fall under 250% of the Federal Poverty Level will see their out of pocket expenses reduced on Silver Plans only. Individuals will pay their monthly “net premium” to the appropriate insurance company The government will pay the difference

  19. Federal Subsidies Individuals are not eligible to receive a subsidy if they have access to a compliant group plan at their place of work or their spouses.

  20. Enrollment • www.healthcare.gov • Directly with carriers • Verification of individual • “Honor system” of income and access to coverage • Enrollment could take 20-60 minutes • Pay premium to process application

  21. Enrollment Assistance • First time buyers • Limited network plans • Need to know all of their options • Some enrollers represent only one company • Transition period allows individuals to enroll when company plan renews

  22. Your Plan and HCR In 2014 there will be “spot checks” to make sure individuals are actually eligible for subsidies Insurers will relax their eligibility requirements Employers with strong plans and contributions should encourage employees to investigate the exchange Once an employee enters the exchange, it could be tough to get them back

  23. Develop a two year plan with Senior Management • What are your expected costs (increases)? • How can we stay compliant? • What would it mean if we dropped heath insurance? • Spouses • What other plans are available? • Communicate with employees • Ask more from your advisor • If you allow your employees to go to the exchange, make sure that they see all options Your Plan and HCR

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