kynecting to Insurance
Kentucky Primary Care Association
November 7, 2013
Presentation to Federally Qualified Health Centers
2
Affordable Care Act: Timeline
• Benefit coverage changes
o Preventive Care at 100% in network
o Children under age 26
o No pre-existing conditions under age 19
o No lifetime / annual dollar limits on
essential benefits
o Patient protections
2010
2011
2012
• Administrative
Simplification
begins to phase in
• Summary of
Benefits and
Coverage
• Essential
health
benefits
• Medicaid
expansion
• Individual coverage
mandate
• Individual subsidy
• State Exchanges
operational
• Rating rule changes
2013
2014
• Exchange coverage
notice
• Increase Medicaid
payment for
primary care
doctors
2015-2019
• States must allow
groups with less than
100 employees into
Exchanges
Overview of the ACA and kynect
3
Affordable Care Act: Notable Impacts
Overall Impacts:
• Introduces new consumer protections
• Improves quality of healthcare
• Increases access to affordable healthcare
• Reduces the overall growth rate of healthcare spending
• Introduces changes to Medicaid and Medicare
• Offers small business owners a chance to receive tax credits for providing coverage
• Requires individuals to have health insurance coverage beginning in 2014
Major impacts on states:
• Ability to implement a new health insurance marketplace: Health Benefit Exchange
o Exchanges are designed to make comprehensive health insurance plans available to
qualified individuals, including small businesses and their employees, the Federal
Government is calling this a Marketplace.
Overview of the ACA and kynect
4
Affordable Care Act: Notable Impacts, continued
Improving Quality, Lowering Cost and Increasing Access to Affordable Care
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Mandates inclusion of preventive care coverage
Provides relief for seniors who hit the Medicare Prescription Drug “Donut Hole”
Requires that 80 cents / premium dollar must be spent on care
Rebuilds the primary care workforce
Increases Medicaid payments to primary care doctors
Improves Medicaid and KCHIP
Establishes state Health Insurance Exchanges for consumers to shop for health plans
Through Exchanges, identifies affordability programs including Medicaid, CHIP, and tax
credits for private insurance plans that consumers may be eligible to receive
Overview of the ACA and kynect
5
Affordable Care Act: Insurance Market Reforms
The ACA included a number of insurance market
reforms also intended to increase access to affordability
of health coverage:
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•
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Prohibits pre-existing condition exclusion
for children
Allows young adults up to age 26 to
remain on parents’ health plan
Ends the practice of rescinding health
coverage
2010
2011
2012
2013
2014
2015-2019
Overview of the ACA and kynect
6
Paths to Coverage through kynect
Even if a consumer thinks they know what IAP(s) they are eligible for, applying for health
insurance through kynect will show them any and all IAPs that apply to them.
Medicaid
Medicaid is a health program that is funded by both state and federal
governments. This was enacted in 1965.
KCHIP
The Kentucky Children's Health Insurance Program (KCHIP) is free or low-cost
health insurance for children.
QHP
with
APTC /
CSR
The Advanced Premium Tax Credit (APTC) provides assistance for purchasing
health insurance.
Cost Sharing Reductions (CSR) provide assistance for payment of healthcare
services received by individuals.
QHP
A Qualified Health Plan (QHP) is a health plan that is subject to a specified list of
requirements related to marketing, choice of providers, plan networks, essential
benefits, and other features.
Paths of Coverage
7
The Pre-Screening Process – Eligibility Determination
• The pre-screening process is a tool that determines
the potential eligibility for IAPs. The information is
entered anonymously and results are not saved.
• Potential eligibility is based on minimum information
entered by the individual (including age, gender,
and household income).
• This process gathers household information and
individual information from the SSP module to
determine potential eligibility.
• No verification of an individual’s information is
performed during the pre-screening process.
kynect Policy & Procedure Instructor-Led Training
Lesson 5: Paths of Coverage
8
The Pre-Screening Process – Pre-Screening Assumptions
The following assumptions have been made in regard to the eligibility pre-screening process:
• An individual must be a resident of or intend to reside
in the Commonwealth of Kentucky and must be a
citizen or lawfully present in the United States.
• These are not verified during the pre-screening
process.
• Family size is defined as the number of Individuals in
the household. For pregnant women, the number of
expected children is added to the family size.
• A disclaimer will appear with the pre-screening
results stating that if medical expenses are greater
than income, then the individual may still be eligible
for assistance.
• Cost Sharing Reduction eligibility is not included in
the pre-screening eligibility tool.
kynect Policy & Procedure Instructor-Led Training
Lesson 5: Paths of Coverage
9
The Pre-Screening Process – Pre-Screening Eligibility Rules
MAGI Medicaid
KCHIP
Eligibility will be
determined based on the
following categories:
• Parents and caretaker
relatives
• Pregnant women
• Children under 19
• Adults age 19-64 with
income less than 133%
of the FPL
KCHIP provides coverage
to qualified children
meeting the following
criteria:
• Children age 19 and
under with income
equal to or less than
213% of FPL who are
not eligible for
Medicaid.
Paths of Coverage
10
The Pre-Screening Process – Pre-Screening Eligibility Rules
Qualified Health
Plans (QHPs)
Individuals will be eligible
to purchase QHPs by
meeting the following
criteria:
• Resident of Kentucky
Note: QHPs are private
insurance and not a form
of Medicaid.
QHPs with APTC
The criteria to receive a
QHP with APTC is:
• Not Eligible for
Medicaid, KCHIP,
Medicare or other
minimum essential
coverage
• Income between 100400% of FPL
Paths of Coverage
11
Essential Health Benefits
The Essential Health Benefits are:
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Ambulatory patient services,
Emergency services,
Hospitalization,
Maternity and newborn care,
Mental health and substance use disorder
services, including behavioral health treatment,
Prescription drugs,
Rehabilitative and habilitative services & devices,
Laboratory services,
Preventive and wellness services and chronic
disease management, and
Pediatric services including oral and vision care
General insurance information
12
Additional Requirements – Dental Insurance on kynect
Kentucky Health Benefit Exchange regulations require the following individuals to have
pediatric dental essential health benefits.
Individuals under age 21
There are two possible ways to purchase the pediatric dental essential coverage:
Stand alone
dental plans
These plans may offer adult dental coverage in addition to the required
pediatric dental coverage.
QHP w /
Dental
Plans that include pediatric dental coverage are considered plans with
“embedded” dental coverage. Managed Care Organizations (MCO) will
always contain a pediatric dental benefit.
Pediatric Dental
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Individual Coverage Options and Qualified Health Plans
All individuals and / or households that buy coverage via kynect will have a cap (maximum
amount) placed on their total possible out-of-pocket spending.
Out-of-pocket spending includes the following expenses that are associate with healthcare:
Deductible
The amount owed by an insured person for a healthcare service covered by
the person’s health plan before the health insurance plan begins to pay.
Coinsurance
An insured person’s share of the costs of a covered healthcare service,
calculated as a percent of the amount of the service.
Copay
A fixed amount for a covered health service, usually when the service is
accessed. The amount can vary by type of covered service.
Premium
The amount that must be paid for an individual’s health insurance or plan.
Note: Premiums are out-of-pocket expenses but do not contribute to an individual’s
out-of-pocket maximum.
General insurance information
14
Actuarial Value
Actuarial value is the percentage of total average costs for Essential Health
Benefits that a plan will include.
•
For an average population actuarial value represents the share of healthcare
expenses the plan covers for a typical group of enrollees
For example, if a plan has an actuarial value of 70%, on average, an individual
would be responsible for 30% of the costs.
•
However, the individual could be responsible for a higher or lower percentage of the
total costs of covered services for the year, depending on their actual healthcare
needs and the terms of their insurance policy.
The premium tax credits we have been discussing are generally based on a plan with an
actuarial value of 70%.
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
15
QHPs – How Actuarial Value and Premiums Relate
Dollars
The Impact on the Standard Consumer
- Generally higher premiums as actuarial
value increases
- Generally lower deductibles as actuarial
value increases
- Generally lower copays and coinsurance
rates as actuarial value increases
Deductibles
Copays / Coinsurance
Premiums
Actuarial Value
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
16
Modified Adjusted Gross Income (MAGI) Methodology
MAGI is the methodology that uses federal income tax
rules and concepts to:
• Count income
• Determine household composition and family size
Federal income tax rules and concepts of adjusted
gross income (with some modifications) are used, but
it is NOT simply a number off a tax return
Modified Adjusted Gross Income is NOT equal to
net income on a tax return
MAGI Medicaid
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What is MAGI?
The calculation of MAGI closely mirrors how the Internal Revenue Service
(IRS) determines adjusted gross income for tax purposes WITH some
modifications
• MAGI takes IRS’ Adjusted Gross Income, and “modifies” it by adding back
in:
o Tax exempt interest
o Social Security income
o Certain Foreign Investment income
• For Medicaid, this Modification excludes:
o Scholarships / Grants for educational purposes
o Certain income of American Indian/Alaska Native
o Lump Sum Income (lump sum is only counted in the month of receipt)
MAGI Medicaid
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Coordinating Eligibility Across All IAPS
The ACA requires a coordinated process for determining eligibility for all IAPs, including:
1.
2.
3.
4.
Medicaid
KCHIP
Advanced Premium Tax Credits (APTC)
Cost Sharing Reductions (CSR)
kynect will consider eligibility for these programs, looking first to the most
comprehensive programs, Medicaid and KCHIP, and then evaluate for APTC and CSR.
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
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What is a tax credit?
Tax credits are not the same as tax
deductions.
• Tax credits directly reduce an
individual’s tax liability (dollar for
dollar).
• Tax deductions reduce the amount
of your taxable income, which is
used to calculate your tax liability.
What are Advanced
Premium Tax Credits?
APTC lowers the cost of insurance for
eligible consumers by providing tax
credits.
APTC is called “payment assistance” on kynect
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
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APTC Eligibility Criteria
Available for individuals with income between 100-400% FPL.
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Must be a tax filer
If married, filing jointly
A Kentucky resident
Citizen or lawfully present
Must not be incarcerated
Cannot be eligible for government insurance or affordable Employer-sponsored insurance
Individuals earning less than 100% FPL may be eligible to receive APTC when denied Medicaid
due to immigration status.
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
21
Individuals NOT Eligible for APTC
Individuals who fall into the following groups are ineligible for APTC:
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Undocumented aliens
Taxpayers who are married filing separately
Non-Tax filers
Individuals who are eligible for Medicaid, Medicare, or any other government
insurance
Anyone with income below 100% and denied Medicaid for a reason other than
immigration status.
Individuals who have Affordable Employer-sponsored Insurance
o Premiums are no more than 9.5% of the annual family income and the
plan value covers at least 60% of the essential health benefit costs
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
22
Minimum Essential Coverage (MEC) and APTC Eligibility
MEC is the minimum coverage an individual needs to have to meet the individual responsibility
requirement under the ACA. Individuals that have health coverage that meets MEC, pre-ACA,
will be in compliance with the individual responsibility requirement.
Individuals ARE NOT eligible to receive APTC if they already have Minimum Essential
Coverage, or are eligible for MEC as defined below:
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•
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Eligible to receive Medicaid or KCHIP
Eligible for programs such as Medicare, Peace Corps, VA Medical, or other qualifying
programs (verified through the Federal Data Service Hub (FDSH))
The individual’s employer provides an affordable health plan
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
23
The APTC Calculation
The APTC amount is determined based on the second lowest cost silver plan, this plan
is considered the benchmark plan. Premiums offered on kynect can only be adjusted by
four factors
• Age
• Family Composition
• Geography
• Tobacco use
The cost of the benchmark plan (second lowest Silver plan) for APTC calculation is
adjusted by age, family composition and geography. It is not adjusted by Tobacco.
The cost is then sent to the Federal Hub along with the family’s income and household
size. Then the Hub determines the maximum APTC based on this information.
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
24
Individuals NOT Eligible for APTC
Individuals who fall into the following groups are ineligible for APTC:
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Undocumented aliens
Taxpayers who are married filing separately
Non-Tax filers
Individuals who are eligible for Medicaid, Medicare, or any other government
insurance
Anyone with income below 100% and denied Medicaid for a reason other than
immigration status.
Individuals who have Affordable Employer-sponsored Insurance
o Premiums are no more than 9.5% of the annual family income and the
plan value covers at least 60% of the essential health benefit costs
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
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Minimum Essential Coverage (MEC) and APTC Eligibility
MEC is the minimum coverage an individual needs to have to meet the individual responsibility
requirement under the ACA. Individuals that have health coverage that meets MEC, pre-ACA,
will be in compliance with the individual responsibility requirement.
Individuals ARE NOT eligible to receive APTC if they already have Minimum Essential
Coverage, or are eligible for MEC as defined below:
•
•
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Eligible to receive Medicaid or KCHIP
Eligible for programs such as Medicare, Peace Corps, VA Medical, or other qualifying
programs (verified through the Federal Data Service Hub (FDSH))
The individual’s employer provides an affordable health plan
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
26
The APTC Calculation
The APTC amount is determined based on the second lowest cost silver plan, this plan
is considered the benchmark plan. Premiums offered on kynect can only be adjusted by
four factors
• Age
• Family Composition
• Geography
• Tobacco use
The cost of the benchmark plan (second lowest Silver plan) for APTC calculation is
adjusted by age, family composition and geography. It is not adjusted by Tobacco.
The cost is then sent to the Federal Hub along with the family’s income and household
size. Then the Hub determines the maximum APTC based on this information.
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
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The APTC Calculation (continued)
kynect calculates the amount of APTC by
comparing the cost of the benchmark plan to
the family’s maximum premium contribution
limit. The difference = the APTC amount.
APTC = Benchmark Plan Premium – Annual Premium Limit
The cost of the benchmark plan is not adjusted by tobacco use, additional premium
cost due to tobacco use, is the responsibility of the applicant.
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
28
Tax Filing Requirements
Individuals who are determined eligible for and purchase a QHP with APTC
must be informed that they must:
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Agree to file a federal income tax return
File a joint income tax return with their spouse if they are married at the end of
the year
Attest that no one else will be able to claim them as a dependent on their
federal income tax return
Attest that they will claim a personal exemption deduction on their federal
income tax return for any individual:
• Who is listed on the application as a dependent;
• Who is enrolled in coverage through kynect; and
• Whose premium for coverage is paid in whole or in part by APTC
: Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
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Reconciliation
When the individual files their taxes at the end of the year, the taxpayer’s APTC will be
reconciled by the IRS with what the taxpayer should have received (using actual
household income and family size for the taxable year).

If the APTC was less than the actual premium tax credit, the individual will receive
an additional credit to reduce their tax liability (for most this will mean an additional
amount of refund).
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If the APTC was greater than the actual tax credit, the individual will owe the
excess as an additional tax liability.
Because of the tax implications related to APTC it is important that we stress the
importance that consumers REPORT ALL CHANGES.
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
30
CSR Plans
•
Cost Sharing Reductions are intended to
reduce the out-of-pocket expenses an
individual must pay when obtaining medical
services.
•
CSR is only available for Silver plans
purchased through kynect. A Silver plan is
one that provides essential health benefits
and has an actuarial value of 70%.
•
All other metal level plans (Bronze, Gold and
Platinum) will also have out-of-pocket
maximums. However, consumers will not
receive a CSR in these plans.
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
31
CSR Eligibility
To be eligible for CSR, an individual must
meet the following eligibility requirements*
• Enroll in QHPs
• Eligible to receive APTC
• The individual is enrolled in a Silver level
plan (with income less than 250% FPL)
Carriers receive funding directly from the
government to buy down out of pocket expenses
for qualified enrollees.
*There is an exception to these requirements
regarding American Indians or Alaskan Natives
(AIAN)
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
32
Categories of CSR
CSR benefits are based on the income categories described below:
•
•
•
Income is greater than or equal to 100% FPL and is less than or equal to 150% FPL
Income is greater than 150% FPL and is less than or equal to 200% FPL
Income is greater than 200% FPL and is less than or equal to 250% FPL
The table below defines these values for consumers who purchase Silver level plans
Actuarial Value
Out-of-Pocket Maximum for Silver QHPs
(Individual / Family)
100 - 150% FPL
94%
$2,250/individual; $4,500/family
151 - 200% FPL
87%
$2,250/individual; $4,500/family
201 - 250% FPL
73%
$5,200/individual; $10,400/family
Income
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
33
CSR- American Indians / Alaskan Natives
There are two separate types of CSR specifically for AI / AN who are
members of a Federally recognized tribe or nation.
1. AI / AN are eligible for CSR (100%) at any metal level of QHP if their income
is below 300% FPL, regardless of where they get their medical care. They
must apply for the Income Affordability Programs to get this benefit.
2. While enrolled in a QHP, they are eligible for $0 cost sharing (no copays or
deductibles) when getting services from Indian Health Services, a tribe or
tribal organization, or through Indian contract health services - no matter
what their income is. They do not have to apply for an IAP.
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
34
Knowledge Check
Can an individual decline his Employer-sponsored insurance and
be eligible for APTC / CSR?
EXAMPLE:
• Joe has a gross household income of $1500.00 / month
• Joe’s employee premium is $230.00 / month
• Effectively, Joe’s premium is 12% of his household income
Yes, because the premium amount exceeds 9.5% of his income, Joe’s ESI is deemed to
be unaffordable and Joe may disenroll from ESI, and apply for APTCs and Cost Sharing
Reductions (CSRs)
Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)
35
Application Intake – QHP Special Enrollment “Triggering Events”
The following life events will trigger a “special enrollment” period for individuals.
Depending on the type of event, the effective coverage start dates will differ.
Birth, adoption, placement for
adoption or placement for
foster care:
Marriage, or an individual
loses minimum essential
coverage (MEC):
Gaining coverage due to a
qualifying event:
Coverage effective on the
date of birth, adoption,
placement for adoption, or
placement for foster care.
Coverage effective on the Coverage effective date will
first day of the following
be the date of the event
month.
that triggered the special
enrollment or the regular
effective dates as
described on the previous
slide.
Paths of Coverage
36
Application Intake – Effective Start Dates - Medicaid
Medicaid has continual Open Enrollment period on kynect; however, applications made
between December 16, 2013 and December 31, 2013 that result in eligibility in one of
the new programs will have a start date of January 1, 2014 to coincide with the start date
of the new eligibility group.
Medicaid and KCHIP enrollment: Consumers will be able to gain as much as 3 months of
retroactive coverage if the consumer states that they’ve had medical expenses in the
previous 3 months. For individuals covered by the new groups, retroactive coverage
cannot predate the start of the eligibility group.
Paths of Coverage
37
Insurance Coverage Exemption Process
Exemptions from the requirement to have health insurance do exist. Exemptions from
having to meet the minimum amount of coverage for individuals may be granted based
on the following situations:
• Religious conscience
• Healthcare sharing ministry
• Indian tribes
• No filing requirement
• Short coverage gap
• Hardship
• Unaffordable coverage options
• Incarceration
• Not lawfully present
Exemptions
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Key Dates for kynect for Individuals – Health Insurance
Initial Open
Enrollment
Initial
coverage
starts
October 1, 2013– Jan 1, 2014
March 31, 2014
Annual Open
Enrollment
October 15December 7
Jan 1, 2015
Overview of the ACA and kynect
39
Key Dates for kynect for Small Businesses – Health Insurance
Annual Open Enrollment - 30 day continuous periods
whenever the business chooses to initiate their enrollment
October 1, 2013–
March 31, 2014
Businesses with less than
50 employees may offer
plans from kynect to
their employees
Jan 1, 2014
Jan 1, 2015
Initial
coverage
starts
Overview of the ACA and kynect
40
Questions?
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Next webinar:
November 21, 2013 11 am – 12 pm EST
kynect FAQs and Tips
Post your questions on the KyPCA kynection forum
Lindsay Nelson
lindsay@kypca.net
502-227-4379
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