What Tribal Leaders Need to Know About the
Affordable Care Act (ACA)
National Indian Health Outreach & Education Initiative
March 11, 2014
Learn more about
1. Impact of the ACA on American Indians and Alaska
Natives (AI/ANs)
2. Medicaid Expansion Benefits AI/ANs
3. AI/ANs Can Enroll in Health Plans through the
Marketplace or local I/T/U
4. Increased Resources for I/T/Us and CHS Savings
5. Tribal Sponsorship
6. Exemptions for AI/ANs
7. Impact on Tribal Employers
Impact of the ACA on American
Indians and Alaska Natives
The Health Care Law
• On March 23, 2010, President
Obama signed into law the
Patient Protection and
Affordable Care Act (ACA)
• The ACA protects the rights of
all Americans, including
American Indians and Alaska
Natives (AI/ANs), to access
affordable health care
• More than 32 million people in
this country who would
otherwise not have health
insurance will have access to
health coverage
Health Care & Federal Trust Responsibility
The government’s
historical and unique legal
relationship with tribes is
based on treaties, laws,
and Supreme Court
decisions
Indian Health Service
offers health care to
AI/ANs on or near Indian
reservations and in some
Urban Indian communities
Health reform offers new
opportunities to access
health insurance to AI/ANs
Impact of the ACA on American Indians and
Alaska Natives (AI/ANs)
• Permanent reauthorization of
the Indian Health Care
Improvement Act
• Strengthens the Indian Health
Service and ensures that
AI/ANs will be able to continue
to receive services from I/T/Us
• Provides special protections for
Indians to gain greater access
to health coverage
Strengthening the Indian Health Service
• Expanded Authority for IHS:
Reauthorization of the IHCIA allows IHS
to modernize its health care delivery
systems & permit tribal governments to
make technical changes in the future
• Greater Workforce: New resources to
increase the number of doctors, nurses
and other health care providers in
AI/AN communities
• Increased Revenue: Third party billing increases funding to IHS that
supports both direct care and contract health care services
Medicaid Expansion Benefits
American Indians and Alaska
Natives
Medicaid Expansion for Indian Country
AI/AN Benefit from Medicaid Expansion
• Tribal Leaders must continue to advocate for
Medicaid Expansion if their state has not opted
to expand
• States have the option to expand Medicaid
eligibility to adults ages 19 - 64 with income up to
$31,322/yr. for a family of 4, or $39,155/yr. in
Alaska*
• Average income of AI/AN households is
$35,192**
• Modified Adjusted Gross Income used to
determine eligibility
• No premiums or deductibles for AI/ANs who
are eligible to and do receive IHS, tribal 638, or
urban Indian health services
• No copays for services received from an Indian
health care provider or through referral under
contract health services
*2013 Federal Poverty Level
**US Census Bureau, 2012
AI/ANs Can Enroll in Health
Plans through the Marketplace
or Local I/T/U
AI/AN Can Enroll In Health Plans through the
Marketplace or Local I/T/U
 AI/ANs May Apply for Medicaid,
Children’s Health Insurance
Program (CHIP), or Marketplace
plans
 Enrollment assistance is available
through the Marketplace or local I/T/U
 Tax Credits for health plans lower the
monthly premiums qualified
individuals pay (up to 400% FPL)
 Family of four with annual income $23,550* $94,200*
*2013 Federal Poverty Level
 Zero and Limited Cost Sharing Plan
Variations available to members of
federally recognized tribes or ANCSA
Corporations
Protections for Indian Country in the Marketplace
Members of federally recognized tribes or
ANCSA Corporations:
• No out of pocket costs if enrolled in a
Zero Cost Sharing Plan Variation (<300%
FPL) or Limited Cost Sharing Plan
Variation (>300%FPL) for services provided
by an I/T/U or through referral by contract
health services.
• Special Monthly Enrollment Period and
can change their enrollment status in any
plan through the Marketplace once a month.
• Eligible for an Exemption from the Shared
Responsibility Payment. Note: Exemption
is not automatic, application required.
 300% FPL = individual
income of $34,470/yr.
and family of four
$70,650/yr.
The Application Process
Enroll in
Marketplace
Plan
Submit single
streamlined
application
to the
Marketplace
•
•
•
•
Online
Phone
Mail
In Person
Verify &
determine
eligibility
Eligible for
Marketplace
or Medicaid/
CHIP
Supported by
Data Services
Hub
Find out more about the Marketplace in your state by
visiting healthcare.gov.
Enroll in
Medicaid/
CHIP
Increased Resources for
I/T/Us
Increased Resources for I/T/Us and CHS Savings
through AI/AN Enrollment
A visit to a tribal clinic
or hospital can be billed
to insurance and in turn
there will be more
resources for your clinic
Insurance will pay
instead of Contract
Health Services (CHS)
More CHS funds
available to help other
Tribal Citizens!
Health care needs of
your Tribal Citizens can
be met and CHS
Savings!
Tribal Sponsorship of
Marketplace Plans
Tribal Sponsorship of Health Insurance Plans
Plan levels in
Marketplace: Bronze,
Silver, Gold &
Platinum
Higher AV Means Less Cost Sharing
Lower Premium
Higher Premium
Plans will vary by: the
cost of premium &
out of pocket costs.
 Some tribes are purchasing health insurance (Qualified Health Plans)
for some or all of its citizens through the Marketplace.
 Zero cost sharing plan variation and limited cost sharing plan variation
available at different metallic levels.
What are Qualified Health Plans (QHPs)
• All insurance plans certified by the
Marketplace must:
• Include 10 Essential Health
Benefits (EHB)
• Limit cost-sharing
 deductibles, copayments, and
out-of-pocket maximum
amounts
• Offer zero cost sharing plan
variation and limited cost
sharing plan variations for AI/AN
10 Essential Health Benefits
Ambulatory Patient Services
Prescription Drugs
Emergency services
Rehabilitative & Habilitative Services and
Devices
Hospitalization
Laboratory Services
Maternity & Newborn Care
Preventive & Wellness Services and
Chronic Disease Management
Mental Health & Substance Use Disorder
Services, Including Behavioral Health
Treatment
Pediatric Services, including
Oral & Vision Care
Benefits of Tribal Sponsorship
• Tribe could purchase the bronze plan (lowest premium) for
Tribal citizens.
• Many Tribal citizens will qualify for tax credits (lowers
monthly premium) and cost sharing reductions.
• Tax credits available up 400% FPL. Family of four with annual
income $23,550* - $94,200*
• Members of federally recognized tribes and ANCSA Corporations
may enroll in zero cost sharing plan variation (<300% FPL) or
limited cost sharing plan variation (>300% FPL)
• Individuals not eligible for plan variations could qualify for cost
sharing reductions if <250% FPL.
• Tribe can bill for services provided to sponsored individuals.
• Result: Increased funding to I.H.S. or Tribal clinic, CHS
savings, and more health services for more citizens in the
community.
Exemptions for American
Indians and Alaska Natives
How Much is the Fine for Not Having Insurance?
• Individuals who can afford health insurance but choose not
to buy it, must pay a fine known as an individual “shared
responsibility payment.”
• In 2014, the fine is $95 per person ($47.50 per child under
18) with maximum of up to $285 per family using this
method OR up to 1% of yearly household income,
whichever is higher. For 2014, the payment is made
through 2014 tax return filing in April 2015.
• In 2015, it is $325 per person or 2% of income; and in
2016, it is $695 per person or 2.5% of income.
Who Qualifies for an Exemption from the Fine?
 Members of federally recognized tribes or ANCSA Corporations;
or individuals eligible for services from an Indian health care
provider.
 Individuals/families where the lowest-priced coverage available
would cost more than 8% of the household income.
 Individuals uninsured for less than 3 months of the year.
 Individuals who do not have to file a tax return because their
income is too low.
 If other other circumstances apply. See
healthcare.gov/exemptions/ for other exemptions.
How do AI/ANs Claim the Exemption?
• Members of federally recognized tribes
and ANCSA Corporations
• May apply for the exemption through
the Marketplace; OR
• May claim the exemption when they
file their 2014 taxes (due April 15,
2015).
• Individuals eligible to receive services
through an Indian health care provider
• May only apply for the exemption
through the Marketplace.
• Once you receive the exemption, you
don’t have to apply again unless your
circumstances change (i.e., no longer
enrolled or not eligible for services).
AI/AN Exemption Application
• Available at:
http://marketplace.cms.gov/getofficialresources/publicatio
ns-and-articles/tribal-exemption.pdf
• Covers both types of AI/AN exemptions.
• One application can be used for the tax household.
• Instructions for the Application will be available soon.
What is Needed to Apply?
• Required documentation to apply:
• Documents showing tribal membership or
eligibility for services from the I.H.S., a tribal
health care provider or an urban Indian
health care provider.
• Social security numbers
• Information about people in your tax
household
Application Process
• Complete and sign the application.
• Mail the application with the required
documents to address provided.
• Per application, applicant will receive a
response within 1-2 weeks if more
information is needed.
• If exemption is approved, applicant will
receive a certificate of exemption number for
filing of tax return.
Impact of ACA on Tribal
Employers
Tribal Employer Opportunities & Requirements
Small Tribal Employer
SHOP
< 50 employees
Small Tribal Non-Profit Employer
Small Business Tax Credits
< 25 employees
ACA
Large Tribal Employer
Shared Responsibility Mandate
≥ 50 employees
ACA Employer Provisions At-A-Glance
Number of employees
ACA Provisions
1 to 24
Small Business Health
Care Tax Credit
X
Small Business Health
Options Program (SHOP)
X
25 to 49
50 to 99
100-200
> 200
X
(up to 50)
IRS Assessable
Payments & Reporting
X
(transition relief
in 2015)
X
X
Why is this Important for Tribes?
• If a Tribe is considered a “large employer,” it
may incur an assessable payment for not
offering health insurance.
• Tribes may be eligible to purchase health
insurance through the Small Business Health
Options Program (SHOP).
• Tribes can strategize to meet ACA employer
requirements in a cost effective manner.
Small Tribal Employer Opportunity
Small Tribal Employer
SHOP
< 50 employees
Small Tribal Non-Profit Employer
Small Business Tax Credits
< 25 employees
ACA
Large Tribal Employer
Shared Responsibility Mandate
≥ 50 employees
What is SHOP?
• SHOP = Small Business Health Options Program
• Designed to help small businesses purchase health insurance
for employees.
• Allows an employer to compare plans based on price, coverage
and quality.
• Employers eligible if ≤ 50 employees (see next slide).
• In 2016, will increase to ≤ 100 employees.
• Tribes and Tribal entities are eligible to participate.
• To find our more about the Marketplace in your State, visit:
https://www.healthcare.gov/marketplace/shop/.
Employer Eligibility Criteria
Generally, an employer is eligible to participate in
SHOP if the employer:
(1) Is a small employer on business days during the prior calendar
year and who employs at least one employee on first day of the
plan year;
(2)Elects to offer all full-time employees coverage in a plan
through a SHOP; and
(3)Has its principal place of business address in the Exchange and
offers coverage to all full-time employees through that SHOP; OR
offers coverage to each eligible employee through the SHOP
serving that employee’s primary worksite (in this case, the
employer participates in multiple SHOPs).
Small Tribal Non-Profit Employer Opportunity
Small Tribal Employer
SHOP
<50 employees
Small Tribal Non-Profit Employer
Small Business Tax Credits
<25 employees
ACA
Large Tribal Employer
Shared Responsibility Mandate
≥ 50 employees
Small Business Health Care Tax Credit
• Qualify if 1 to 24 full-time equivalent
employees.
• Per IRS Guidance, an agency or
instrumentality of an Indian tribal
government is not eligible for the tax credit
unless it is a 501(c)(3).
• Other Tribally owned entities may be eligible
for the tax credit (e.g., an entity organized
under State law).
Eligibility for the Tax Credit
A small employer may qualify for a tax credit if the
small employer meets all of these requirements:
1. Fewer than 25 full-time equivalent employees
(FTEs);
2. Pays an average annual wage of less than
$50,000 per year per FTE; and
3. Pays for at least 50% of the cost of health
insurance coverage for each of its employees.
About the Tax Credit
• The tax credit is a percentage of premiums paid by employer.
• Percent is sliding scale based on employer size and average
wage.
• Beginning January 1, 2014, maximum credit is:
• 50% for small business employers
• 35% for small tax-exempt employers
• The maximum credit is available to employers with ≤ 10 FTE
employees and average annual wages of $25,000.
• In 2014, the credit will only be available for employers that
purchase insurance coverage through a SHOP.
• The employer can only receive the credit for 2 consecutive
years (beginning in 2014).
Large Tribal Employer Requirement
Small Tribal Employer
SHOP
< 50 employees
Small Tribal Non-Profit Employer
Small Business Tax Credits
< 25 employees
ACA
Large Tribal Employer
Shared Responsibility Mandate
≥ 50 employees
Employer Shared Responsibility Mandate
• Employer Shared Responsibility Mandate provisions
(i.e., assessable payments):
• Applicable to employers with > 50 full-time
employees, including full-time equivalent
employees.
• In 2015, transition relief for employers with 50 to 99 full-
time employees (certification required).
• Final regulations issued on February 12, 2014.
• Delayed to 2015 (IRS Notice 2013-45).
What is the Mandate?
• The Employer Shared Responsibility mandate
means that an employer will be subject to an
“Assessable Payment” or “Shared
Responsibility Payment” for not offering
health insurance coverage that is affordable or
that does not provide minimum value to its
full-time employees and their dependents.
How the Mandate Applies to Tribes
• Tribal governments and subdivisions of Tribal
governments are not exempt.
• The rules specific to governmental entities (which includes
Tribal governments and subdivisions of Tribal governments)
have not been issued by the IRS.
• All Tribal entities will have to comply with these
provisions to avoid Assessable Payments.
• Tribal businesses, organizations and all other entities such as
casinos, retail businesses, health centers, nursing homes and
non-profit organizations.
• See 26 U.S.C. § 4980H, 78 Fed. Reg. 218, and 79 Fed
Reg. 8544.
Determining Large Employer Status
• Many employers will know they are a large employer
without having to count their full-time employees.
• Number of full-time employees (average of 30 hours
of service per week) and full-time equivalent
employees (FTEs) are counted.
• A specific method must be used to count hours of service for hourly and
non-hourly employees.
• Large employer status determined in current year for
following calendar year.
• Transition Relief in 2015: Employers close to threshold may use a one-
time period of six consecutive months to determine large employer
status.
45
Steps to Determine Large Employer Status
1.
2.
Calculate the number of full-time employees (including
seasonal workers) for each calendar month in the prior year.
Calculate the number of full-time equivalent employees
(including seasonal workers) for each calendar month in the
prior year.
• Full-time equivalent employees = Add the total number of hours of service of
part-time employees in a calendar month and divide by 120.
3.
4.
Add the number of full-time employees and full-time
equivalent employees for each month of the calendar year.
Add up the 12 monthly numbers and divide by 12.
Steps to Determine Large Employer Status
(continued)
• The Result
• If the result is less than 50, the employer is
not a large employer.
• If the result is 50 or more, the employer is a
large employer.
• Employer may not be considered a large employer if the Seasonal Worker
Exception applies.
Seasonal Worker Exception
An employer may not be considered a
large employer if:
• The employer’s work force only exceeds 50
full-time employees for 120 days or less
during the calendar year; and
• The employees in excess of 50 who were
employed during that 120 day period or less
were seasonal workers.
Definition of Seasonal Worker
• Seasonal worker = “…a worker who performs labor or services
on a seasonal basis as defined by the Secretary of Labor,
including (but not limited to) workers covered by 29 CFR
500.20(s)(1), and retail workers employed exclusively during
holiday seasons.” 79 Fed. Reg. 8581.
• Employers may use a good faith interpretation of seasonal
worker under DOL Regulations 29 CFR 500.20(s)(1).
• Per IRS guidance:
• The 120-period may be applied using four calendar months (whether or
not consecutive) or a period of 120 days (whether or not consecutive).
• Not limited to agricultural or retail workers.
Transition Relief for Employers with Fewer
than 100 Full-Time Employees in 2015
An employer must satisfy these conditions:
(1) Employs 50 to 99 full-time employees (including FTEs) on
business days during 2014.
(2) Does not reduce its workforce or overall hours of service of
its employees between 2/9/14 to 12/31/14 in order to satisfy the
workforce size condition (except if for a bona fide business
reason).
(3) During “coverage maintenance period,” does not eliminate or
materially reduce the health coverage it offered as of 2/9/14 .
(4) Certifies that it meets conditions (1) to (3) on a prescribed
form.
Two Ways to Identify Full-Time
Employees
• Two ways to identify full-time employees:
(1)
(2)
Monthly Measurement Method; or
Optional Look Back Measurement Method.
• Employers identify full-time employees in 2014
and offer coverage in 2015.
• Large Tribal Employers need to start planning
now to determine what method they will use.
Companies with a Common Owner
• Parent corporations and subsidiaries
• To determine large employer status, total the number
of all full-time employees (including full-time
equivalent employees) working at all companies.
• If the total number of employees is at least 50 fulltime employees, then each separate company is
considered a large employer.
• Even if each separate company employs less than 50 full-time
employees.
52
To Avoid Assessable Payments
• A large employer must offer to its full-time employees
and their dependents the opportunity to enroll in
health insurance coverage:
• That provides Minimum Essential Coverage under an Eligible
Employer-Sponsored Plan;
• That is Affordable; and
• That provides Minimum Value.
• If offered, a full-time employee would not be eligible
for a premium tax credit or cost sharing reduction.
• The assessable payment is triggered by the
employee’s receipt of a tax credit or cost sharing
reduction.
Plan, Affordability & Minimum Value
Requirement
Explanation
Eligible
Employer
Sponsored
Plan
(1) Group health insurance coverage offered by, or on behalf of, an employer
to the employee that is either:
-- a governmental plan within the meaning of section 2791(d)(8) of the
Public Health Service Act (PHS Act) (42 U.S.C. 300gg–91(d)(8)) (e.g., FEHB
Program),
-- any other plan or coverage offered in the small or large group market
within a State, or
-- a grandfathered health plan, as defined in section 5000A(f)(1)(D),
offered in a group market;
(2) Self-insured group health plan under which coverage is offered by, or on
behalf of, an employer to the employee.
Affordable
“Employee only” contribution towards the premium is < 9.5% of the
employee’s household income. Note: Safe Harbors available.
Minimum
Value (MV)
Plan has to cover at least 60% of the total allowed cost of benefits that
are expected to be incurred under the plan. MV calculator at:
http://www.cciio.cms.gov/resources/regulations/index.html#pm.
How Assessable Payments Can Be
Incurred
If a large employer:
(1) Does not offer coverage to at least 70% (in 2016,
95%) of its full-time employees (and their
dependents*), OR
(2) Offers coverage to at least 70% (in 2016, 95%) of its
full-time employees (and their dependents*) but the
coverage is not affordable or does not provide
minimum value;
AND at least one full-time employee receives a
premium tax credit or cost sharing reduction in the
Marketplace.
*If dependent coverage transition relief does not apply.
Assessable Payments in 2015
Types:
(1) Employer Does Not Offer
Coverage or Offers Coverage to Less
Than 70% (in 2016, 95%) of Full-Time
Employees*
(2) Employer Offers
Coverage to at least 70%
(in 2016, 95%) of Full-Time
Employees* but Coverage
is Not Affordable or Does
Not Provide Minimum
Value.
Calculation
1/12 of $2,000 per full-time employee,
not including the first 80 employees (in
2016, 30 employees)
1/12 of $3,000 per
employee
Approximately $166.67 per employee,
per month X number of employees > 80.
$250.00 per employee, per
month.
(1/12=assessed
monthly)
Dollar Amount
*Assessable payment triggered by a full-time employee receiving a premium tax credit or
cost sharing reduction in the Marketplace.
Assessable Payments in 2016 and
Forward
Types:
(1) Employer Does Not Offer
Coverage or Offers Coverage to
Less Than 95% of Full-Time
Employees*
(2) Employer Offers
Coverage to at least 95%
of Full-Time Employees*
but Coverage is Not
Affordable or Does Not
Provide Minimum Value.
Calculation
1/12 of $2,000 per full-time employee,
not including the first 30 employees
1/12 of $3,000 per
employee
Approximately $166.67 per employee,
per month X number of employees > 30
$250.00 per employee, per
month
(1/12=assessed
monthly)
Dollar Amount
*Assessable payment triggered by a full-time employee receiving a premium tax credit or
cost sharing reduction in the Marketplace.
Employees with Access to Coverage
• Employees with access to an eligible-
employer sponsored plan that is
affordable and that provides minimum
value cannot obtain a premium tax credit
or cost sharing reduction in a
Marketplace.
Key Points to Remember
1. The ACA provides an opportunity to improve the
health of all American Indians/Alaska Natives.
2. Medicaid Expansion benefits AI/ANs and tribal
leaders must continue to advocate for expansion.
3. AI/ANs can enroll in health plans through the
Marketplace or their local I/T/U.
4. The ACA increases resources for I/T/Us through
billing and CHS Savings.
5. Tribal Sponsorship of plans provides another
opportunity to increase funding to I/T/Us.
6. AI/AN exemption from the Shared Responsibility
Payment is not automatic and Tribal citizens will
need to apply for the exemption.
7. Large tribal employers need to start planning now
to meet 2015 ACA requirements.
With generous support from
the Indian Health Service