Greater Washington Association of
Health Underwriters
February 13, 2013
A service of Maryland Health Benefit Exchange
Today’s Agenda
What is a Health Insurance Exchange?
Maryland Health Connection
– Individual Consumers
– Small Business Health Options Program (SHOP)
Large Employer Implications
The Role of Producers
Implementation Update
Ways to Get Involved
What is a State-Based Health Insurance
The Patient Protection and Affordable Care Act requires each state to establish
a “health insurance exchange” by 2014
A marketplace where individuals and small businesses explore, compare and
enroll in private health insurance and public assistance programs, as well as
access federal tax credits and cost-sharing subsidies
States had a choice to establish a state-based exchange, join a partnership or
the federally-facilitated exchange; Maryland opted to establish a state-based
health insurance exchange
What it is NOT:
The state-based health insurance exchange is NOT an insurer or issuer of
health insurance plans.
Why It’s Important to Maryland
Expands access to health insurance for 730,000 Marylanders
(13% of Maryland) currently without health insurance
– Gives individuals access to primary care physicians,
preventive services
Provides federal subsidies for individuals up to 400% of FPL
to pay for health insurance premiums
– Infuses $600 million in federal subsidies into the State of
Maryland by 2015  NEW funds in health care system
Lowers uncompensated care costs in the healthcare system
Guiding Principles
Informed by public input seven principles guide the policy decisions of MHBE to ensure that
the state-based health insurance exchange serves the health care needs of Maryland
individuals, families, employers and employees:
Accessibility: reduce the number of Marylanders without health insurance and improve access for
all Marylanders.
Affordability: the affordability of coverage, within the Exchange and within the state, is essential to
improving Maryland’s health care system and economy.
Sustainability: The Exchange will need to be sustainable in order to succeed in the long run.
Stability: promote solutions that respect existing strengths of our state’s health care system and
promote stability
Health Equity: The Exchange should work to address longstanding, unjust disparities in health
access and health outcomes in Maryland.
Flexibility: be nimble and flexible in responding to the quickly changing insurance market, health
care delivery system, and general economic conditions in Maryland, while being sensitive and
responsive to consumer demands.
Transparency: MHBE is accountable to the public, and its activities should be transparent, its
services easily available, and its information easily understandable by the populations it assists
Maryland Health Connection –
a service of the Maryland Health Benefit Exchange
What is the Maryland Health
Maryland Health Connection is the name for Maryland’s health
insurance marketplace
Maryland Health Connection is a marketplace where individuals,
families and small businesses can:
– Compare health insurance options
– Calculate total out-of-pocket costs based on eligible subsidies or tax
– Enroll in the health plan that’s best suited for their needs
Maryland Health Connection will have many assistance resources for
consumers and small businesses:
– the eligibility and enrollment portal
– In-person assistance through navigators and insurance producers
– Consolidated Services Center
Individuals & Families
Maryland Health Connection –
Individuals & Families
One single entry point for commercial insurance and Medicaid
– No wrong door approach
Offers tax subsidies and cost sharing reductions to individuals
and families
– Only place individuals can access subsidies
– Federal government will pay a portion of costs for health
insurance for people who earn up to 400% of FPL
– Cost sharing reductions are available to individuals under
250% of FPL
Open Enrollment Period Begins: Oct. 2013
Coverage Effective: Jan. 2014
Small Business Health
Options Program (SHOP)
Small Businesses Health Options
Program (SHOP)
Maryland Health Connection will have a Small Business Health
Options Program (SHOP) dedicated portal for small businesses and
their employees
Small businesses (including non-profits) with up to 50 employees may
In 2016, the ACA modifies the definition of small group to 100
SHOP supports the existing market (does not replace it), small
employers will still be able to purchase insurance outside of the SHOP
Carriers above a minimum threshold must offer products in the SHOP
Why Consider the SHOP?
Tax Credits for Health Insurance will only be available through beginning October 1, 2013
Employer Benefits
– Innovative plan options that are easy to administer
– Access to tax credits to offset the cost of employee premiums
– Employee choice model
– Ability to work with producers and third party administrators
Employee Benefits
– A wider choice of plans that suit their individual needs
– Online enrollment
– Ability to manage their accounts online
SHOP Plan Set-Up & Enrollment
Employer is evaluated
for eligibility to
purchase QHP based
on demographic
Plan Set-up
Employer selects a
metal level (Employee
Choice) or a carrier
(Employer Choice)
and sets defined
contribution amount;
can designate a
SHOP provides an
estimated quote
based on employer
choices and employee
census (age, income,
Employees make
plan selections
with information
on employer
contribution and
their expected
Validate that all
requirements for
the employer (e.g.
creditable coverage
for employees)
have been met
Notify carriers to
contract with
employer and
start coverage
for employees
SHOP Administration
• Premium aggregation and billing
• Carrier payment
• On-going eligibility / enrollment management
(employee adds, deletes, life changes, etc.)
• Enrollment and funds flow reconciliation
Two Options for Small Employers:
Employer vs. Employee Choice
Employer Choice
Employee Choice
Counting Methodology Comparisons
The employee counting methodology impacts whether a group will be
eligible to purchase on the SHOP
The Maryland Exchange Board approved the FTE aggregation
method consistent with federal rules for tax subsidies
Employers can decide whether to offer coverage to full time
employees only or all employees
Small Business Tax Credit
2010-2013: Maximum tax credit for small employers
is 35% of the qualified premium for health insurance
for employees
– Maximum tax credit for small tax-exempt
employers (charities) is 25%
January 1, 2014, rate increases to:
– 50% tax credit for small employers
– 35% for small tax-exempt employers (charities)
Tax Credit Eligibility
– Fewer than 25 full-time equivalents, with average
wages of less than $50,000 per year
– Provide 50% of single (not family) coverage for
each employee
– Calculations are made on a sliding scale
– Tool available on IRS website
Large Employers
Large Employers
Must offer coverage to their employees
– Must meet minimum essential value
– Cannot be less than 60% actuarial value
– Cannot be more than 9.5% of employee’s income
If coverage isn’t offered and 1 person gets subsidies
– Will be assessed $2000 for each FTE over 30 employees
If offer coverage but fails the tests above and 1 person gets
– Will be assessed $3000 per assisted employee or $2000
for all employees over 30 – whichever is less
MHBE Role in Large Groups
Maryland Health Connection must report all individuals
receiving subsidies to federal government through hub
Maryland Health Connection will capture employer information
during enrollment process
– Anyone eligible for coverage through employer?
– Anyone currently enrolled through employer?
– Employer group plan information
Employer name
FTE status
Lowest cost plan
Employee contribution for self-only coverage
Frequency of contribution
The Role of Producers
Consumer Assistance
MHBE expects to have multiple resources available for
consumers who need assistance with understanding
insurance options.
– Outreach and Education
• Advertising
• Events and Business Outreach
– Online at
– In Person & Telephonic Assistance:
• Producers
• Connector Entities/Navigators
• Call Center
The Role of Producers
Maryland has designed a prominent
role for producers as it works to create
Maryland Health Connection.
Producers will be key partners to help
individuals and small businesses get
access to plans offered on Maryland
Health Connection.
MHBE is designing a Producer
Services Program to ensure
producers receive information and can
provide input.
– Communication Tools
– Training & Authorization Program
– Producer Advisory Council
Producer Input
Producer Advisory Council
Council members will be asked to comment on:
– Strategies to maximize the participation of producers
– Strategies to educate small businesses and develop
outreach tactics
– Content for producer training
– Authorization procedures for selling exchange plans
– Marketing tools for producers
– Support services for producers
Implementation Update
What’s Next?
Federal Certification: Maryland Received Conditional Certification on
December 10, 2012 (among 1st six states)
Continued development of IT system
Staffing MHBE
– Producer Services Manager
– TPA Services Manager
Outreach & Education: Q2 2013
Consolidated Services Center (Call Center): July 2013
Producer Training: Starting mid-late July 2013
Open Enrollment: October 1, 2013 - March 31, 2014
Ways to Get Involved Now!
Online Resources
Sign Up for Email Updates
Sign Up for Text Updates: Text
“Connected” to 69302
Get information on insurance resources
available to help now
Link to details on meetings and reports
Meeting Information
RFP Announcements
Job Information
Thank you!
For questions on the information contained in this presentation,
please contact:
Tequila Terry
Director, Plan & Partner Management
Maryland Health Benefit Exchange
Email: [email protected]