2014 Update of Affordable Care Act
Provisions for Small Businesses
South Dakota Association of School Business Officials
Annual Fall Conference
September 25, 2013
Lisa Carlson
Director of Planning & Regulation
Keeping It Simple.
Grandfathered vs. Non-Grandfathered Plans
Before we begin…let’s talk “GF” and “NGF” Plans
Small Group Market:
Plans can remain grandfathered and do not have to incorporate the
following into their benefits design(s):
- 100% coverage of Preventive Care Benefits
- Essential Health Benefits
- Deductible limits
- Per-Member Premium Rating (modified community rating rules)
- Non-Discrimination Requirements
- Metal Plan Requirements
- Limits on maximum-out-of-pocket cost-sharing
If you can’t remember if you’re GF or not, ask your carrier.
2014 Small Group “Non-GF” Transition Plan…
Option for Non-Grandfathered Small Group Plans:
1. Transition to a Simplicity metal-level plan as of the first of your
plan year on or after January 1, 2014.
–
Starting Oct. 1 with an effective date of January 1, 2014.
2014 Small Group Grandfathered Renewals…
For Grandfathered Small Group Plans:
• Can renew “as is” or transition to another grandfathered
Signature Series plan.
• If you move to a Simplicity plan , you automatically become
non-grandfathered.
Tip: Simplicity small group plans are the only plans offered
to non-grandfathered small groups after 1.1.14
Welcome to our Simplicity Small Group Plans
About Simplicity
Sanford Health Plan Simplicity small group plans will be available January 1, 2014. Simplicity offers
qualified health plan options to small employers with less than 50 employees.
The Simplicity Advantage
Access to a network of over 15,000 providers and hospitals in several states
Flexibility to choose your own providers, including specialists, without a referral
Access to over 60,000 pharmacies nationwide
Fast, accurate and friendly customer service
Claims processed locally for greater efficiency
Nationwide coverage for services
Worldwide emergency coverage, 24 hours a day
Medical information available online
An online Health Management Tool available 24 hours a day/7 days a week & Programs
Value-Added Services
A Simplicity Shop, offering employees a personalized shopping experience under a business plan
Simplicity Small Group Plan Designs
5 South Dakota small group plans options:
▪ Simplicity $3,000
▪ Simplicity $2,000
▪ Simplicity $1,500
▪ Simplicity $500
▪ Simplicity Platinum ($0 deductible plan)
Welcome to our Simplicity Small Group Plans
For sale beginning October 1, 2013 with effective dates beginning January 1, 2014. Any new sales
beginning January 1, 2014 will only have the below metal level options.
Tip: The Simplicity $3,000 is an HSA Qualified Plan
Plan Name
Metal Level
Actuarial Value
EHB
MOOP
MEC
Simplicity $3,000
Bronze
60%
Yes
Yes
Yes
Simplicity $2,000
Silver
70%
Yes
Yes
Yes
Simplicity $1,500
Gold
80%
Yes
Yes
Yes
Simplicity $500
Platinum
90%
Yes
Yes
Yes
What does all of this mean?
Actuarial Value…
Actuarial Value (AV) – This is the amount on average that
Sanford Health Plan will pay for medical costs after
premium payments.
So for example: An employer chooses to offer the Simplicity
$2,000 Plan. Sanford Health Plan will pay on average 70% of
the medical costs incurred for the member, the remaining
30% would be the member’s responsibility.
Essential Health Benefits…
Essential Health Benefits(EHB) – These are the health benefit categories
that must be required in all qualified health plans, but are not limited to:
▪ Ambulatory Patient Services, such as doctor’s visits
▪ Hospitalization
▪ Mental Health and Substance Use Disorder Services, Including Behavioral
Health Treatment
▪ Rehabilitative and Habilitative Services and Devices
▪ Laboratory Services
▪ Emergency Services
▪ Maternity and Newborn Care
▪ Prescription Drugs
▪ Preventive and Wellness Services and Chronic Disease Management
▪ Pediatric Services including oral care, offered as part of a package or as a
stand-alone plan
Minimum Essential Coverage…
Minimum Essential Coverage (MEC) – Refers to the coverage (i.e. coverage under a
group or individual plan) required to avoid the penalty for not having health
insurance effective 1/1/14. Minimum essential coverage that satisfies the individual
mandate includes the following types of coverage:
•
•
•
•
•
Coverage under an “eligible employer-sponsored plan,” which generally means
coverage under a group health plan, whether insured or self-insured, including
coverage under a federal or non-federal governmental plan;
Coverage under an employer-sponsored retiree health plan;
Coverage under certain government programs, such as Medicare, Medicaid, the
Children’s Health Insurance Program (CHIP) and TRICARE;
Coverage in the individual insurance market, including a plan offered by an Exchange;
and
Other coverage recognized by HHS, including self-funded student health coverage and
coverage under Medicare Advantage plans.
Quoting Small Group Simplicity Plans
▪ Small employers can offer up to all 5 of our small group plan options to
their employees
▪ Small employers must be accepted when applying for coverage,
currently we have had the option to max rate the group, it will now all be
based on per member community rating
▪ Sanford Health Plan will have a small group quick quote online for you
to run the employer’s census to determine the rates for that employer
based on employee, spouse and dependent ages
▪ You will receive a small group Simplicity options booklet which will
include detailed information on plans, provider network, paper or
online enrollment options for employee’s and much more
Our Simplicity Shop for employers…and their employees!
▪ The Simplicity Shop allows you to provide all Sanford Health Plan small group
options to your employees, offering them more choices to select the right
coverage for them based on their needs and lifestyle.
▪ The Simplicity Shop creates an online personalized shopping experience for
your employees, all still being offered under a small business model.
▪ How does it work? It’s simple! Once you as the small employer choose your
plan options through Sanford Health Plan, we create a customized account for
your employee’s during your open enrollment period to go out onto the
interactive Simplicity Shop and enroll in the plan option that best fits their
health insurance needs and lifestyle.
Small Group Simplicity Plans
Small Group Business Requirements:
▪ Enrollment periods allowed year round
▪ Do not have to offer coverage to spouses or dependents. However, keep in
mind this may affect minimum participation standards
▪ Effective 1/1/15, all small group renewal dates will be reset to a calendar
year, you can still keep your open enrollment period anytime of the year, but
rates will re-set every January
▪ First of the month effective dates will be honored throughout the year
▪ SBCs must be provided within 30 days of plan selection
Small Group Simplicity Plans
Small Group Business Requirements:
▪ Special Enrollment periods allowed outside of annual enrollment period as
long as application is received within 30 days of event
▪ Gain or lose dependent
▪ Loss of minimum essential coverage (MEC)
▪ Loss of coverage through public program (Medicaid or CHIP) Note – 60-day
period allowed
Quoting Small Group Plans
• Small employers can offer one or many small group plan options to their
employees
• Small employers cannot be declined when applying for coverage.
• Rates will all be based on per member community rating
• Sanford Health Plan (and the Marketplace) will have a small group quick
quote online for you to run the employer’s census to determine the rates
for that employer based on employee, spouse and dependent ages
The SHOP option for small employers
www.healthcare.gov/smallbusiness
You can purchase our products through the Marketplace SHOP
Small Group Rates
Small employers retain the flexibility to determine
employer/employee contributions:
•
Fixed Percentage: Employer pays a fixed percentage of each employee’s agerated premium (employee premium contributions vary by age)
•
Defined Contribution:
Defined Employee Contribution– Employee pays a fixed dollar amount for
coverage. Employer pays the remainder of the age rated premium
Defined Employer Contribution – Employer pays a fixed dollar amount
towards each employee’s premium. Employee pays the remainder of the age rated
premium (employee premium contributions vary by age)
Small Group Plans
Small Group Business Requirements:
▪ Enrollment periods allowed year round
▪ Do not have to offer coverage to spouses or dependents. However, keep in
mind this may affect minimum participation standards
▪ Effective 1/1/15, all small group renewal dates will be reset to a calendar
year, you can still keep your open enrollment period anytime of the year, but
rates will re-set every January
▪ First of the month effective dates will be honored throughout the year
▪ SBCs must be provided within 30 days of plan selection
Small Group Plans
Small Group Business Requirements:
▪ Special Enrollment periods allowed outside of annual enrollment period as
long as application is received within 30 days of event
▪ Gain or lose dependent
▪ Loss of minimum essential coverage (MEC)
▪ Loss of coverage through public program (Medicaid or CHIP) Note – 60-day
period allowed
Keeping It Simple.
Small Group Training Inside the Marketplace SHOP
The SHOP option for small employers
What’s the Same Inside & Outside the Marketplace SHOP in 2014?
▪ Small Group Plan Designs & Rates
▪ No small group underwriting
▪ Removal of Pre-Existing Conditions
▪ An employer can offer 1 Carrier, and up to all plan options
▪ Service Area: the business must be to domiciled in South Dakota
▪ Billing will be handled between the carrier and the employer
▪ Waiting period for new employees cannot exceed 90 days, therefore, the longest
waiting period allowed is 1st of the month following 60 days
▪ Special Enrollment Periods (30 days)
▪ Employer must submit first month’s premium with application
▪ Agent Compensation
The SHOP option for small employers
What’s Different Inside vs. Outside the Marketplace SHOP with in 2014?
If an employer chooses to offer coverage outside the Marketplace SHOP:
•
Employer can choose eligiblitity requirements of employee’s (i.e. 35 or 40 hours per week)
•
Enrollment is all done directly with your insurer - like it currently is today
•
Employer must meet 75% minimum participation - like it currently is today
•
All plan changes throughout the year can be done through the employer and Sanford
Health plan - like it currently is today
•
Sanford Health Plan can provide COBRA/continuation administration – like it currently is
today
•
Sanford Health Plan handles the renewal process
The SHOP option for small employers
If an employer chooses to offer coverage through the SHOP:
•
•
They can compare all carriers available and their plan options side by side\
Coverage must be offered to all full-time employees (those working 30 hours per week)
•
If an employer qualifies, they are eligible for a small business tax credit
•
Enrollment in the SHOP. The employer must setup an account, as an agent you may help
assist if you are certified and you would place your NPN on the application.
•
Employer must meet 75% minimum participation in the SHOP to be eligible
•
All plan changes throughout the year need to be done through the SHOP, employees setup
their own marketplace accounts with username and passwords
•
It’s an employer’s responsibility to notify employee’s of terminated coverage, offer COBRA and collect
COBRA premiums etc.
•
It’s an employee’s responsibility enroll in COBRA
•
The SHOP handles the renewal process, employers are notified 90 days
prior to the end of their plan year
Small Employer Tax Credits
Available only through the SHOP beginning in 2014.
So who’s eligible?
•
Fewer than 25 full-time equivalent employee’s
•
Pay average annual wages below $50,000 per FTE
•
Contribute at least one half (50%) of the cost of each of their employee’s health
insurance premium
•
Tax credit in 2014 for for-profit employers: 50% of premiums
•
•
Tax credit in 2014 for non-profit employers: 35% of premiums
The tax credit is highest for companies with fewer than 10 employees who are
paid an average of $25,000 or less. The smaller the business, the bigger the
credit.
Small Employer Tax Credits
•
The credit will be available for two consecutive taxable years.
The tax credit is highest for companies with fewer than 10 employees who are
paid an average of $25,000 or less
• The smaller the business, the bigger the credit.
How do you claim the credit?
• Use Form 8941 to calculate the credit.
• If you are a small business, include the amount as part of the general business
credit on your income tax return.
• If you are a tax-exempt organization, include the amount on line 44f of the Form
990-T. You must file the Form 990-T in order to claim the credit, even if you
don't ordinarily do so.
• You may be able to carry the credit back or forward.
• If you are a tax-exempt employer, you may be eligible for a refundable credit.
•
Insurance Market (Rate) Reforms in Small
Group Marketplace…
Insurance Market Reform Rules
Per-Member Rating for Small Groups
Calculating Rates will be limited to:
• Your age
• Where you live (rating region)
• The plan you chose (benefit package)
• Whether you’re a tobacco user or not
Insurance Market Reform Rules
South
Dakota
Rating
Regions
Insurance Market Reform Rules
Calculating the Family Rate
• Premium = sum of all family members
• Family rate capped at the 3 oldest children under the age
of 21. Example:
Member Age
Mom
45
Dad
46
Child 1
25
Child 2
18
Child 3
15
Child 4
12
Child 5
9
Total Monthly
Premium
Tobacco
Status
Non
Non
User
Non
Non
Non
Non
Monhtly
Premium
$300
$310
$195
$90
$90
$90
$0
$1,075
Sanford Health Plan is committed to providing information to help
you understand the many layers of Health Care Reform and how it
may impact your business. We appreciate your time today and
please contact our team at any time or visit the Health Care Reform
section of our website at sanfordhealthplan.com
Questions? Thank you…