Healthy Business Chat
07/10/2014
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What Is An Insurance Exchange?
• An Insurance Exchange is an organized marketplace for insurance plans to compete and offer
services efficiently in the small group and individual markets.
• An Exchange provides a level playing field for health insurance plans to comply with benefit
requirements and consumer protections required under the ACA. The same health insurance
plans that are offered on the Connecticut Health Insurance Exchange website, will also be
available directly from the insurer.
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Basic Introduction to PPACA
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Basic Introduction to PPACA
• INDIVIDUALS must have health insurance by January 1, 2014.
• SMALL EMPLOYERS are not required to offer health coverage or
pay for coverage for their employees.
• LARGER EMPLOYERS who do not offer health coverage to their
employees may be subject to a penalty if they do not offer minimal
essential coverage (MEC) or offered coverage is unaffordable.
– 100 FTEs – 2015
– 50 to 99 FTEs - 2016
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Key Affordable Care Act (ACA) Provisions
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No medical underwriting
No denial of coverage due to a pre-existing condition
Minimum medical loss ratio (“MLR”) established
No more than a 90 day waiting period for new hires
Minimum coverage requirements (Essential Health Benefits)
Extensive preventative services provided at no cost
Elimination of industry and gender rating
Qualified plans evaluated and given seal of approval
Plans organized in metal tiers – bronze, silver, gold and platinum
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Health Insurance Options Under ACA
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Small Employers
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Some quick “stats”‐ Connecticut
• In 2008 the Connecticut Office of Legislative Research Report provided the
following numbers for businesses in Connecticut relating to health insurance
coverage:
• Private employers offering health coverage : 65%
• Businesses with 50 or more offering health coverage: 98%
• Business with fewer than 50 employees offering health coverage: 55%
• These rates of private insurance offerings are above the national average.
Subject to change based on State and Federal Guidance as well as final decisions made by the Exchange.
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How Will the Marketplace Affect Small Businesses?
•Starting in 2014, a SHOP was available in the State.
•Starting October 1, plans will be available for review and
enrollment for coverage starting as soon as January 1,
2014.
–Rolling monthly enrollments for employers after
January 1
•Once a group is enrolled, its rate is guaranteed for 12
months.
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How Will the Marketplace Impact Small Businesses?
(cont’d.)
•To enroll, employer must:
–Have its principal place of business or an
employee worksite in a SHOP’s service area.
–Have at least 1 eligible employee:
o In most cases, spouses and children cannot
be counted.
o Sole proprietors without other employees may
enroll through the individual market Marketplace.
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SHOP = Small Business Health Options Program
• Currently, the following insurance carriers have said they will
participate in the SHOP:
– Anthem Blue Cross & Blue Shield of CT
– HealthyCT
– United Healthcare
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The SHOP Continued
• SHOP will have multiple health plan options, including bronze,
silver, and gold plans.
• Small Businesses Owners can decide to have their employees
purchase vertically, horizontally or use a single choice.
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The SHOP Continued
• Small businesses will have consolidated billing.
• No Membership Fee will be charged to
participate in the SHOP.
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The SHOP continued
• Employers can decide how much to contribute toward premium
costs.
• Employers can collect employee share of premiums through
payroll deduction.
• Premium contributions can be made with pre-tax dollars.
• Tax Credits for Small Businesses and Nonprofits can only be
obtained through the Connecticut Health Insurance Marketplace.
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Qualifying for the Small Business Tax Credit
• Contribution to health care coverage
– Do you cover at least 50% of the cost of health care coverage for your
workers based on the single rate?
• Firm size
– Do you have fewer than 25 Full Time Equivalents (FTEs)
• Average annual wage
– Do you pay average annual wages below $50,000?
• Both taxable (for-profit) and tax-exempt organizations qualify
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Calculating the Small Business Tax Credit
• Firm Size (FTEs) = Total Full Time Employees + Total Annual Part
Time Hours/2080
– Owners are excluded from FTE count and employer cannot receive tax
credit for owner’s insurance
– All employee hours counted and based on 40 hour week
• Wages = Total Wages Paid/ FTEs
– Owner and family member wages are excluded from total wages
• Maximum Small Business Tax Credit
– Up to 50% of a small business' premium costs in 2014 for two years
– Up to 35% for tax-exempt employers (refundable via payroll tax) for
two years
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Four Inputs for Small Business Tax Credit
• Input
1. Full Time Employees
2. Part Time Employee Total Hours
3. Total Wages
4. Employer Portion of Total Premiums
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Small Business Tax Credit : Illustration
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Small Business Tax Credit : Illustration
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Small Business Tax Credit : Illustration
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Example of IRS form for Small Employers
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Employer Health Care Arrangements
• Q1. What are the consequences to the employer if the employer does not establish
a health insurance plan for its own employees, but reimburses those employees for
premiums they pay for health insurance (either through a qualified health plan in
the Marketplace or outside the Marketplace)?
• Under IRS Notice 2013-54, such arrangements are described as employer payment
plans. An employer payment plan, as the term is used in this notice, generally does
not include an arrangement under which an employee may have an after-tax
amount applied toward health coverage or take that amount in cash compensation.
As explained in Notice 2013-54, these employer payment plans are considered to
be group health plans subject to the market reforms, including the prohibition on
annual limits for essential health benefits and the requirement to provide certain
preventive care without cost sharing. Notice 2013-54 clarifies that such
arrangements cannot be integrated with individual policies to satisfy the market
reforms. Consequently, such an arrangement fails to satisfy the market reforms and
may be subject to a $100/day excise tax per applicable employee (which is $36,500
per year, per employee) under section 4980D of the Internal Revenue Code.
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Employer Health Care Arrangements
• Q2. Where can I get more information?
• On Sept. 13, 2013, the IRS issued Notice 2013-54, which explains how the
Affordable Care Act’s market reforms apply to certain types of group
health plans, including health reimbursement arrangements (HRAs),
health flexible spending arrangements (health FSAs) and certain other
employer healthcare arrangements, including arrangements under which
an employer reimburses an employee for some or all of the premium
expenses incurred for an individual health insurance policy.
• DOL has issued a notice in substantially identical form to Notice 2013-54,
DOL Technical Release 2013-03, and HHS will shortly issue guidance to
reflect that it concurs with Notice 2013-54. On Jan. 24, 2013, DOL and HHS
issued FAQs that addressed the application of the Affordable Care Act to
HRAs.
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Individuals
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What is the Enrollment Process for the Individual
Market Marketplace?
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Advanced Premium Tax Credit for Individuals
For exchange plans only
Income ranges for
133% to 400% FPL
To be eligible, individuals must:
Have incomes between133% and
400% of federal poverty level (FPL)
Not have access to minimum
essential coverage through their
employer or have access to coverage,
but it is not affordable
Premium credits –
for any level plan
Cost-sharing subsidies –
Silver Plan only
Individual:
$15,282 to $45,960
Family of four:
$31,322 to $94,200
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Commercial Carriers offered in Individual Marketplace
• Anthem Blue Cross & Blue Shield of CT
• Connecticare Benefits Inc
• HealthyCT
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When Can Individuals Enroll?
• Annual Open Enrollment (after first year)
–November 15, 2014 to February 15, 2015
–Coverage begins January 1
•Consumers eligible for Medicaid and CHIP can enroll at anytime.
• Special Enrollment Period
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Special Enrollment (SE)
• Occurs almost entirely outside of open enrollment
• For how long?
– 60 day SE window for most Individual SE events
– 30 day SE window for most SHOP SE events
• Who is eligible?
– The directly effected party
– The rest of the QHP household that was effected
• (not a dependent for a previous EE plan if no dependents were offered
coverage previously)
– No SE event for those who could have enrolled previously*
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Individual Market SE events (examples)
• loss of Minimum Essential Coverage (MEC)
• gaining or becoming a dependent
• Such as birth, marriage, adoption, placement for adoption
• person who gains lawfully present status
• error, misrepresentation, or inaction of an officer, employee, or agent of the
Exchange or HHS, or its instrumentalities
• Qualified Health Plan substantially violated a contract provision
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Recap
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Things you can do
• Learn about different types of health insurance. Through the Marketplace,
you’ll be able to choose a health plan that gives you the right balance of costs
and coverage.
• Make a list of questions you have before it’s time to choose your health plan.
For example, “Can I stay with my current doctor?” or “Will this plan cover my
health costs when I’m traveling?”
• Make sure you understand how insurance works, including deductibles, outof-pocket maximums, copayments, etc. You’ll want to consider these details
while you’re shopping around.
• Start gathering basic information about your household income. Most people
will qualify to get a break on costs, and you’ll need income information to find
out how much you’re eligible for.
• Set your budget. There will be different types of health plans to meet a variety
of needs and budgets, and breaking them down by cost can help narrow your
choices.
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Plan Management: Qualified Health Plan (QHP) Issuers
QHP Issuers
Individual
Standard
Plans
Individual
SHOP
Non-Standard Standard
Plans
Plans
SHOP
Non-Standard
Plans
Anthem
1 Gold
1 Silver*
1 Bronze
1 Gold
1 Silver*
2 Bronze
1 Catastrophic
1 Gold
1 Silver
1 Bronze
1 Gold
1 Bronze
ConnectiCare Benefits, Inc.
1 Gold
1 Silver*
1 Bronze
2 Bronze
1 Catastrophic
0
0
HealthyCT
1 Gold
1 Silver*
1 Bronze
1 Bronze
1 Catastrophic
1 Gold
1 Silver
1 Bronze
1 Bronze
UnitedHealthcare
0
0
1 Gold
1 Silver
1 Bronze
0
*All Individual Silver Plans include three cost sharing reduction plans
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Questions
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Contact Information
Access Health CT Website for Individuals :
http://www.accesshealthct.com/
Phone Number for Individuals is 855-805-4325
Access Health CT Website for Small Businesses:
http://www.accesshealthctsmallbiz.com/
Phone Number for Small Businesses is 855-762-4928
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Small Print
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