aca 201

Tennessee Health Care Campaign

The Affordable Care Act 201

Shared Responsibility, Premium Tax Credits, and Enrollment, OH

MY!


Shared Responsibility

• Individual responsibility– Must have minimum essential coverage, obtain

exemption, or face penalty• Employer responsibility

– Applies to “large” employers– Must offer “affordable” and “adequate” coverage

to employee


Employer Definitionsfor shared responsibility

Average of at least 50 full-time equivalent employees during preceding calendar year.

Less than 50 full-time equivalent employees during preceding calendar year.


Defining Types of Workers• Full-time = 30 hours per week• Part-time = less than 30 hours per week• Full-time equivalent (FTE) = combined hours of

part-time workers that add up to the equivalent of a full-time worker


Example: Calculation of FTEsInez owns a floral & garden centersFull-time: 35 Part-time: 16, each working 100 hours/monthIs Inez a large employer?

Calculate PT hours(16 PT employees x 100 hrs/mo) / 120 hrs = 13.33 = 13 (round down)

Add FT and PT35 FT + 13 PT = 48 FTEs

Inez is not a large employer.


Employer Coverage Requirements

• An offer must be extended to full-time employees (and their dependents)– Full-time defined as average of at least 30 hours a

week– Special rules for variable hour and seasonal

employees• Dependent includes children to age 26• Dependent does NOT include spouse


Employer Penalties


Affordable?

Coverage is considered affordable if employee contribution for self-only coverage is less than 9.5% of household income.

Employee contribution for self-only coverage is used to determine affordability for both employee and dependents.


Affordability of Employee-Only Coverage

Example 1Income: $40,000/yrJohn’s share of the

premium: $200/month

Is the plan affordable?Cost: $2,400Share of income: 6%

The plan is affordable.

Example 2Income: $25,000/yrJohn’s share of the

premium: $200/month

Is the plan affordable?Cost: $2,400Share of income: 10.4%

The plan is not affordable.

John


Affordability of Family Coverage (Reyes Family)Mom works at Acme. She earns $35,000/yr. Dad is an

entrepreneur and earns about $12,000.

Family income: $47,000

Premium cost to employee for employee-only plan: $196/mo ($2,350/yr) = 5% income

Premium cost to employee for family plan: $509/mo ($6,110/yr) = 13% of income

Bottom LineCoverage is considered

affordable.


Questions?

Comments?

Violent Dissent?


PREMIUM TAX CREDITS


What are premium credits?

• Assistance with the cost of coverage for people purchasing coverage in the new Health Insurance Marketplaces (aka Exchanges)

• Available starting Jan 1, 2014• Administered through the tax system and the

Marketplaces


FPL

400%

300%

200%

100%

Children (CoverKids)

Undocumented Immigrants

Adults w/o Children

People with Disabilities

ParentsPregnant Women

0% 0%

■ Medicaid and CHIP (Tennessee 2012 eligibility levels)■ Uninsured or insured via other coverage source

Insurance Marketplace Subsidized

Unsubsidized

2014138% Medicaid Expansion 126%

75%

Who’s Eligible

185%

250%

138%

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Income and Household Size

Income: Modified Adjusted Gross Income (MAGI)

Adjusted Gross Income (1040, Line 37)+ Foreign Income

+ Tax exempt interest+ Non-taxable Social Security benefits

MAGI

Household size: Household unit equals tax unit - “Household” may or may not be the same as who is in the insurance plan.


Tax credit determination

Cost of benchmark plan- expected premium

contribution

Credit Amount

Credit amount affected by:• Individual or family’s expected contribution based on their income• Premium cost for benchmark plan


Expected Premium Contribution


Expected Contributions & Income

1 for a household of one (i.e., an individual)2 based on second-lowest priced SILVER health plan in the Marketplace3 residents that would be eligible for Medicaid are ineligible for tax credits


John

Plan cost: $5,000

Example 1: 200%Income: $22,980

Expected Contribution:• Share of income: 6.3%• Amount: $1,448

Premium Credit: $3,552

Example 2: 300%Income: $34,470

Expected Contribution:• Share of income: 69.5%• Amount: $3,275



What is the Benchmark Plan?• Second-lowest cost silver plan available to

each eligible household member


Example: Single IndividualJohn• 24 years old• Income: $22,980 (200% FPL)• Expected contribution: 6.3% or $1,448

3 Lowest Cost Silver Plans for John• Plan A: $4,800• Plan B: $5,000• Plan C: $5,200

Benchmark

Premium Credit$5,000 - $1,448 = $3,552


Family of four (Reyes Family)Income: $52,988 (225% FPL)Expected contribution: 7.18% or $3,802

3 Lowest Cost Silver Plans that Cover Entire Family• Plan A: $14,800• Plan B: $15,000• Plan C: $15,200

Benchmark

Premium Credit$15,000 - $3,802 = $11,198


Rating Factors • Age

– Limited to no more than 3 to 1 variation– Each family member rated separately

• Family size– Total premium for family = sum of premiums for each

family member– Exception: In families with > 3 members under 21,

count only 3 oldest children• Geographic area• Tobacco Use

– Limit to no more than 1.5 to 1 variation– Doesn’t affect premium credit


JohnIncome: $22,980 (200% FPL)

Age 24Premium: $5,000


Age 64Premium: $15,000



JohnIncome: $22,980 (200% FPL)

Age 24, Non-SmokerPremium: $5,000Benchmark: $5,000Premium Credit: $3,552

Age 24, SmokerPremium: $7,500Benchmark: $5,000Premium Credit: $3,552


What Kind of Coverage?


Premium Credits & Plan Choice

John: Eligible for premium credit of $3,552


Over 900,000 uninsuredEveryone will enroll….

Right?

30


Enrollment isn’t a snapProgram

Percent of Eligible People Enrolled

Adult Medicaid, national average 62%

Subsidized Medicare for low-income seniors 33%

Medicare Rx benefit low-income subsidy, 2009* 40%

Unemployment benefits 72-83%

Earned income tax credit 80-86%

SNAP (food stamps) 54-71%

* Does not include populations automatically enrolled in the low-income subsidy.

Take-up in optional public benefit programs

31


700,000

3,846

32

Tennessee Health Care Campaign33


A New Way to Enroll in Coverage

34


New Systems Can Support Consumer Self-Service

• Easy-to-use online applications• Pop-up help boxes• E-chat• Personal “MyAccount”• Upload documents• Electronic notices

35


But….

75% want in-person assistance

Source: Enroll America Research, November 2012

78% don’t know what’s coming

83% don’t know they’re eligible

36


“Get Covered Tennessee”

37


Potential Community Partners

• Community health clinics• Family resource centers• Tax preparation sites• Literacy councils• Local non-profit organizations• Child/family-focused direct service agencies• Churches and congregational networks

39


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Shameless Plug


Questions?Comments?

Violent dissent?

Brad A. Palmertree, BSWTennessee Health Care Campaign

[email protected]


@thcc_242

aca 201

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