aca and small biz presentation
TRANSCRIPT
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Manny Munson-Regala JD
Assistant to the Commissioner
Minnesota Department of Health
September 30th, 2013
THE ACA’S AND SMALL BUSINESS:
IMPACT IN MN
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AGENDA
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• Why Reform?
• Provisions affecting Small
Businesses
• MNsure
• What Next
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WHY PASS THE ACA?
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VALUE PROPOSITION?
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MINNESOTA
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HOW IS MN DOING?
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Recognized as a leader in health and health care, but…
• Increase in uninsured
• Health disparities between populations
• Health care spending continues to increase (13.9% of
state economy (up from 12.8% in 2006)
Used to be 1st in the UnitedHealthcare rankings, now 5th
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ENROLLMENT FOR SMALL GROUP
491,079
359,775
0
100,000
200,000
300,000
400,000
500,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Fully Insured market only
Source: MDH, Health Economics Program; estimates based on data from various sources.
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COMPOSITION OF THE WORK FORCE
Up to 100% FPL, 2.7%
101 to 200% FPL, 35.3%
201 to 300% FPL, 29.5%
301 to 400% FPL, 12.0%
More than 400% FPL , 11.9%
Small employer population includes employees who work for an employer with 2 to 50 employees.
Source: MDH Health Economics Program analysis of the 2011 Minnesota Health Access Survey. 8
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ACA AND SMALL BUSINESS
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SELF EMPLOYED
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• Individual mandate- can be satisfied by ESI (including
COBRA and retiree coverage), Medicare, Medicaid,
CHIP, VA coverage and TRICARE
• Can purchase on the MNsure
• Access to tax credits on sliding scale
• Coverage through Medicaid expansion
• Coverage through Minnesota Care
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• No employer mandate
• Protected by MLR rule
• Limited to $2500 contribution for
FSAs
• Medicare withholding increases
from 1.45% to 2.35% for higher
compensated employees (e.g.
200k)
• No more waiting period after
2014 for ESI
• Eligible to participate in MNsure
• If offer coverage, must provide “Summary of Benefits and Coverage”
• Wellness incentives up to 30% of premium; with up to 50% difference for tobacco use
• Two tax credit programs- but not for employers 25 to 50
• Must provide notices to their employees about exchange, tax credits and potential impact on employer contribution
50 OR FEWER EMPLOYEES
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• Department of Labor (DOL) requires employers to notify current and new employees notices of their coverage options
• Generally applicable to all employers that employ one or more employees that produce $500,000 annually
• All new employees must begin receiving the notification by October 1st, 2013 within 14 days of hire
• Current employees hired prior to October 1st, 2013 must receive the notification by October 1st, 2013
• Can be sent via email
• Examples can be found on the DOL
website
http://www.dol.gov/ebsa/healthreform/i
ndex.html
• Must inform the employee of:
• the existence of Mnsure
• contact information of Mnsure
• explain that employees may be
eligible for premium tax credits
under the ACA; and
• that purchasing products through
MNsure may eliminate employer
contributions
EMPLOYER NOTICE
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GOAL? 1.3 MILLION MINNESOTANS
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Individual Consumers –
300,000
Small Businesses and
Employees – 150,000
Medical Assistance/
MNCare – 850,000
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Advantages of Exchanges in general
• Transparent, competitive market with
better information and more choices
• Aggregated buying power
• Defined contribution and employee
choice of issuers and plans
• Option for employer defined
contribution with one bill, one check
administration
Advantages specific to MNsure
• Employer tax credits
Advantages resulting from market reforms
• Rating reforms in individual and small
group markets
• Risk adjustment in small group market
• Limits on allowable Minimum Loss
Ratio
• Increased risk pool from more
Americans covered
WHY MNSURE AND ACA INSTEAD OF CURRENT
MARKET
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• Must exist in each state (either as
state or federal exchanges) Minnesota
decided to implement state-based
exchange or marketplace called
MNsure
• May be separate or combined with
individual exchange We have one
marketplace
• Must be self-supporting by 2015
MNsure funded by fee of up to 3.5% of
MNsure premiums
• Individual and small group risk pools
may be combined or kept separate
Currently separated
• Serves 1-100, or, at state option: 1-50
until 2016 Minnesota at 50
• States may expand to larger
employers beginning in 2017 Policy
decision still to come
• State agency, non-profit or hybrid
Minnesota created quasi state agency
(subject to some but not all state rules)
• Active purchaser or clearinghouse
Clearinghouse in 2014, Board’s option
afterwards
SHOP EXCHANGES: ACA OPTIONS AND
MINNESOTA'S CHOICES
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MNSURE: DEFINED CONTRIBUTION
• States can offer employers options:
– (1) employees can choose any QHP offered in the SHOP in any tier;
– (2) employers select specific tiers from which an employee may choose
a QHP;
– (3) employers select specific QHPs from different tiers of coverage from
which an employee may choose a QHP; or
– (4) employers to select a single QHP to offer employees
MNsure will offer all of the employer options
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MNSURE: BILLING AND OTHER SERVICES
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• MNsure will:
• provide bill with details of employer and employee contribution
• employee pays employee contribution through payroll deduction
• employer sends total premium to the SHOP
• Premiums remain the same throughout the employer’s plan year
• Customer service provided by a broker, MNsure or the insurer
• Changes to coverage during the year (adds/drops) made on MNsure
• MNsure notifies employer of renewal process
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MNSURE: PRODUCT OFFERINGS
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• Three companies approved to sell small group health policies on MNsure
• Blue Cross Blue Shield
• Medica
• Preferred One
• 63 products at all metal levels
• All products must meet new insurance rules
• Essential Health Benefits
• Rules on annual/lifetime limits
• Definition of dependents
• Mix of broad and narrower networks
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• In 2014, small group health
rates inside and outside
can only use:
• an individual or family
• geographic area
• age (but by no more
than a 3:1 ratio), and
• tobacco use (but by no
more than a 1.5:1 ratio).
In region 8 (metro area), a
business with five employees
can buy:
• Bronze from $507 to
$1,014
• Silver from $594 to $1,187
• Gold from $702 to $1,403
• Platinum from $894 to
$1,788
MNSURE: COSTS
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MNSURE: TAX CREDIT
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• Only available in MNsure
• Small employers that provide healthcare coverage are eligible (a “qualified
employer”) if:
• They have fewer than 25 full-time equivalent employees (FTEs) for the
tax year
• The average annual wages paid are less than $50,000 per FTE
• The employer pays at least 50% of the premium cost under a “qualified
arrangement”
• For more information on the tax credit, go to this link
http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-
Employers
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MNSURE: ENROLLMENT
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• Because small employers do not have to offer
coverage, they can:
• Enroll starting October 1, 2013 for coverage starting
as soon as January 1, 2014
• Enroll and begin coverage any time after January 1,
2014
• If you plan to use MNsure, you must offer coverage to
all of your full-time employees
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MNSURE: PARTICIPATION
REQUIREMENTS
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• Current MN law only requires guaranteed issue for small
employers if the small employer:
• contributes at least 50 percent toward the cost of coverage
for each eligible employee;
• AND at least 75 percent of the eligible employees who have
not waived coverage participate in the plan.
• MNsure will waive both requirements for employers purchasing
November 15 to December 15, 2013.
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PROJECTED IMPACT
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MNsure commissioned study by Gruber-Gorman to
model out impact of ACA on MN. Some relevant
findings:
• Increased premiums for a healthier groups and decrease
premiums for the less healthy groups
• Overall premium impact flat
• 150,000 projected small employers enrolled in MNsure
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DECISION POINTS FOR SMALL
BUSINESSES
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• No requirement to offer health insurance but there are
some incentives.
• MNsure offers more options and possible bargaining power
• Premium tax credits available through MNsure.
• Employee demand
• Some workers better off with a premium tax credit if they go through the
exchange
• Other workers not eligible for large exchange tax credits will take
coverage offered through work
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AFTER THE ACA, WHAT NEXT?
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FROM HEALTH CARE TO HEALTH
Economic and social conditions
influence the health of people and
communities .
Factors related to health outcomes
include: • Early childhood development
• Education
• Employment status
• Type of work
• Food security
• Access to health services and quality of those
services
• Housing status
• Income
• Discrimination and social support
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Minnesota
Your ZIP Code May Be More
Important to Your Health Than
Your Genetic Code
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SUMMARY
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• Small Employers have many options
• Employer Mandate does not apply
• One option is MNsure which offers:
• 3 carriers with various products
• Defined contribution options
• Aggregated billing
• Access to Agents and Brokers
• Access to Tax Credits
• Potential aggregated buying power
• Next? From Health Care to Health
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RESOURCES
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• www.mnsure.org , www.mnsure.com or 855-3-MNSURE, or 855-
366-7873- for information on Mnsure
• Agents or Brokers
• In-Person assisters (check MNsure for up to date locations and
names)
• Small Business Minnesota
• www.healthreform.gov- for information on the ACA generally