Cost-effective options for the Employer Shared
Responsibility provisions of the Affordable Care Act
11367s0814
Edt.08.25.14

• Employer Shared Responsibility (Pay or Play)
• Impacts, Requirements & Penalties
• Product Solutions for Large Employers
• Sample Cases
• Submissions and Underwriting

Home Office - Overland Park, Ks.
2 nd generation family-owned business
Founded 1970
Proprietary systems
Company Culture
Innovation
Stability
Service
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• Underwriting
• Claims Administration
• Policy Service
• Actuarial
• Compliance
• Product Development
• Case Management
• Sales & Marketing
• Legal
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What you need to know and learn to understand Pay or Play
ACA Pay or Play Regulations and Language:
• What is an applicable large employer?
• What is an FTE? How to count FTEs?
• How do the penalties work?
• PMEC/Skinny Plans/MVP/Narrow Plans
• Affordability
• 2015 rules vs 2016 rules – group size, penalties
• Transition relief rules - All employee test/All FT employee test
These are the high points -THIS IS NOT
ALL!!!! Expect the rules to change
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For the
Individual
- Employee
1.
Individual Mandate says individuals must have health insurance or pay a penalty.
• Penalty starts at $95 for 2014 then in 2016 escalates to
$695 or 2.5% of taxable income (which ever is greater).
2.
Insurance can be employer provided or an individual plan.
Must be qualifying Minimum Essential Coverage .
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For a
Business – Employer
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less than 100 more than 100
Based on full-time equivalent employee counts.
Part-timers count!
In 2016, the employer size drops to 50!
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Employer coverage must meet TWO levels of tests under Section 4980H
“A” test – “The Sledgehammer”
• Must provide Minimum Essential
Coverage to 95% of full-time eligible employees (70% in 2015)
• The Penalty? $2,000 per full-time eligible employee less the first 30 (80 in 2015)
• Penalty triggered by employee going to the Exchange and receiving subsidy
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Employer coverage must meet TWO levels of test under Section 4980h
“B” test – “The Tackhammer”
• Must provide Minimum Value Coverage to 95% of employees
• Coverage must be Affordable (no more than 9.5% of household income).
• The Penalty? $3,000 per employee who receives subsidized coverage on the
Exchange
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PENALTY EXAMPLES
Employer with 180 full-time eligible employees
( A) Failure to provide MEC:
$2,000 (180 - 80*) = $200,000 non tax deductible penalty ($300,000 in 2016!)
(B) Failure to provide Minimum Value affordable coverage:
$3,000 per employee with subsidized coverage
* less 80 is 2015….less 30 in 2016
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1. Pay the penalty?
2. Find the cheapest way to avoid penalties?
3. Provide a major medical health plan to everyone?
4. Provide an affordable alternative in the middle?
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• Creative suite of products to meet any employer’s needs
• Uses a mix of self-funded and fully insured options
• Low-cost Alternatives
• Meets Current Minimum Essential Coverage (MEC) and Minimum Value standards
• Four plan levels
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Offering four plan levels to manage the expense of this mandate:

Plan Level 1 – Self Funded PMEC
• Preventive Services Only Minimum Essential
Coverage (PMEC)
• Meets MEC requirement and avoids the employer sledgehammer penalty
• Meets individual mandate and covered employees avoid that individual penalty
• Lowest cost way to avoid penalties
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Plan Level 2 – Fully Insured Limited Benefit Plans
Fixed Indemnity plan on top of PMEC
• Allows employer to provide additional benefits on top of a PMEC plan
• Employer paid or voluntary
• Benefits for hospitalization, office visits, Rx drugs
Gap Plan
• Supplement for high deductible plans
• Employer paid or voluntary
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Plan Level 3 – Self-funded Minimum Value Plans
Allied Minimum Value Plan (MVP)
• Low Cost Narrow MVP plan – one size fits all
• Guaranteed Issue – No Medical Underwriting
• First dollar benefits - $0 deductible with copays
• Eliminates In-Patient, Surgery and Specialty Drugs
• Adds indemnity benefits for In-Patient & Surgery
• Currently Satisfies Minimum Value 60% standard
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Plan Level 3 – Self-funded Minimum Value Plans
Allied MediPay Plan
• Comprehensive Major Medical - Controls costs by basing provider reimbursement on Medicare
• Physicians reimbursed at 125%
• Facilities at 125-200% as selected.
• Lowers monthly costs 10% to 30% below traditional PPO reimbursement
• Members subject to balance bill
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Plan Level 4 – Self Funded Traditional Plans
• Allied Funding Advantage Plans
• Premium Advantage – traditional PPO plans
• Provider Freedom – no network, see any provider, protection from balance bills
• MediPay Plan – no network, Medicare reimbursement Employee is responsible for all balance bills under MediPay
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Assumptions
• Employer Contribution 100% of PMEC Plan
• 90% Participation combined required
Type of Risk
FT employees
Management - Group Major Medical
Penalty Exposure (After tax)
Penalty Exposure per FT employee
PMEC Cost (350 FT employees)
PMEC Cost per employee (annually)
Restaurant Chain
425
75
$986,000
$2,817
$210,000
$600

•
Assumptions
75% participation required
Type of Risk
FT Employees
Management - Group Major Med
Penalty Exposure (After tax 2015)
Penalty Exposure (After tax 2016)
Penalty Exposure per FT Employee (All 2015 -80)
Penalty Exposure per FT Employee (All 2016 -30)
Minimum Value Plan Participants
Minimum Value Plan Costs (estimate)
Minimum Value Plan Annual Costs - Total
Construction Company
130
25
$142,857
$285,714
$1,099
$2,857
85
$2,400
$204,000

Fully Insured Structure
• Limited Benefit
• Gap Plans
Self Funded Structures
• Funding Advantage, PMEC, MVP, MediPay
• 12-21 contracts
• Plan run out period ends the last day of month 21
• Refunds calculated in month 22
• Refunds disbursed in month 23
• Monthly accounting summary
• Quarterly claims reports
• Renewal offers on all groups

Provider Freedom
& PPO Plans
• Employee IS NOT responsible for any balance bill
Medipay, MVP & PMEC
• Employee IS responsible for all balance bills
ID cards for PMEC/MVP/MediPay will show Medicare reimbursement levels.
Members receive Advocacy help in balance bill situations.

Recommended timeline for
• Complete submissions should arrive in Allied underwriting department not less than 15 to the desired effective date.
• Submissions received on or before the 10 th receive priority consideration.
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Duration of underwriting determined by:
• Size of the account
• Quality and completeness of submission
• Availability and cooperation of the employer &
• Firm rates in 7-10 days
• From submission to case delivered – 14 to 20 days
• Shelf life of enrollment form is 40 days – up to 60 recertification
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Duration of underwriting process
• Size of the account
• Accuracy of census
• Allied National workflow
• Firm rates in 3-5 days
• 7-10 days to complete documentation and issue
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Funding
Advantage
& MVP
Default
2-6% adjustable as required
PMEC 10%
Limited Benefit & Gap TBD
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Contact Us
Email or fax data to “Sales” sales@alliednational.com
888-767-7133
Fax: 913-945-4390
Our Team
• Dan Meylan: National Sales Director; 913-945-4253
• Bill Ringhofer: Regional Sales Manager; 913-945-4266
• Randy Wehner: Sales Manager; 913-945-4267
• Matthew Bryon: Account Executive; 913-945-4255
• Cheryl Knight: Account Executive; 913-945-4261
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Allied Sales Support
888-767-7133 www.alliednational.com
sales@alliednational.com
twitter.com/alliednational
Fax: 913-945-4396
Allied National, Inc.
4551 W. 107 th St. #100
Overland Park, KS 66207
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