arkansas blue cross and blue shield an independent licensee of the blue cross and blue shield...
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ARKANSAS BLUE CROSS and BLUE SHIELDAn Independent Licensee of the Blue Cross and Blue Shield Association
Health Care Reform
From an Insurer’s Perspective
Providers and their employees
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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October 1 – Health Insurance Marketplaces (Exchanges) open across the country
December 15-must be enrolled by this date for coverage to be effective January 1, 2014
January 1 – Much of the regulation impacting employers starts becoming effective
March 31-last day for individuals to enroll for coverage during 2014 unless you have a qualifying event
Important Dates
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Regulations changing in small group market
New rating rules New benefits and
coverage requirements Medicaid expansion
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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New Rating MethodologyEffective for non-grandfathered groups with 2-50 employees at the first renewal on or after January 1, 2014
Gender rating removed Industry rating removed Common geographic rating established by regulators Tobacco load nationally 50% (Arkansas 20%) Health status and pre-existing conditions no longer considered Age rating reduced from 6:1 ratio oldest to youngest to 3:1
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Premium Rate Calculation Unique rate calculation for every member Member-level, rather than employee-level, census
required to comply Every member on an employee contract has a
unique rate
Rates developed for up to 3 minor children 4th minor child (and any additional) is free Children age 21+ must be rated as adults
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Essential Health Benefits
Prescription drugs
Rehabilitative and “habilitative” services and devices
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including dental and vision care
Non-grandfathered small group health plans – offered on or off the Small Employer Health Options Program (SHOP), must provide these government-mandated essential health benefits
Essential health benefits include services in the following 10 categories:
Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substanceuse disorder services, including behavioral health treatment
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ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Additional Benefit and Coverage Requirements
Deductibles
Annual Limits
Coinsurance Maximums
No greater than $2,000/$4,000 (adjusted annually) unless required by “reasonable” product design
No annual or lifetime dollar limits on essentialhealth benefits
Must be replaced by true out-of-pocket maximums
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Metallic Coverage LevelsActuarial Values for Levels of Coverage Provided by Qualified Health Plans
Actu
aria
l Val
ue fo
r Lev
els
of C
over
age
BRONZE SILVER GOLD PLATINUM10%
100%
60%70%
80%90%
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Examples: Small Group Metallic Plans
$3,000
60%
$6,350
$2,000
80%
$6,350
$1,000
80%
$3,000
$500
90%
$1,000
STANDARD BENEFITS Bronze Silver Gold Platinum
Deductible
Coinsurance
True Out-of-Pocket Max
ADDITIONAL OPTIONS
PCP Copay
Drug Copay
n/a
n/a
$30
$10/$40/$60
$20/$40
$10/$30/$50
$20/$40
$10/$30/$50
Bronze Silver Gold Platinum
ARKANSAS BLUE CROSS and BLUE SHIELDAn Independent Licensee of the Blue Cross and Blue Shield Association
Offering Coverage to Employees
How Employers Win
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Arkansas’ Medicaid “Private Option”
Arkansas Health Care Independence Program
Adults between 17% and 138% of FPL now are eligible to participate in the Medicaid program
In Arkansas, these newly eligible participants will shop for coverage on the Health Insurance Marketplace and purchase Medicaid-approved benefit plans offered by private carriers
Very desirable benefits at no premium cost
Employees may be eligible for Medicaid-no penalty or cost to the employer
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Employer-shared Responsibility Provisions: “Play or Pay” Penalties
Offer minimum essential coverage (group health plan) or pay $2,000 per employee (after the first 30)
Coverage must meet minimum value requirements (60%) and affordability requirements (employee contribution of 9.5% of W-2 income or less) or pay $3,000 for every employee receiving subsidized coverage except those on Medicaid
Enforcement postponed until 2015
ONLY APPLIES TO Employers with 51 or more FTEs:
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Small Employer Health Options Program
Available For
SubsidiesFirst-Year
Employers
Employers with 2-50 employees in 2014 (2-100 in 2016)
No subsidies are available for employees; employer contribution takes its place
Will choose plan from one carrier on behalf of all employees
Subsequent Years
May be employee choice
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Small Employer Tax Credit Must buy through the SHOP to qualify Available for 2014 and 2015 only Available to employers who:
Have fewer than 25 FTEs (excluding owner and family members)
Have average annual wages below $50,000 Contribute uniform amount of at least 50% of employee-
only premium
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Small Employer Tax Credit Maximum tax credit 50% of employer
contribution
Tax credit decreases with average wage and firm size increases
Reduction to the 50% maximum credit when employee count exceeds 10 and/or the average annual wage exceeds $25,000
Lose grandfathered status
ARKANSAS BLUE CROSS and BLUE SHIELDAn Independent Licensee of the Blue Cross and Blue Shield Association
What would happen to their employees
Small Employers Might Drop Coverage
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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2013 Federal Poverty Level (FPL)
Medicaid
$11,490
$15,510
$19,530
$23,550
$27,570
$31,590
$35,610
$39,630
Medicaid
$15,282
$20,628
$25,975
$31,322
$36,668
$42,015
$47,361
$52,708
6.3%
$22,980
$31,020
$39,060
$47,100
$55,140
$63,180
$71,220
$79,260
9.5%
$34,470
$46,530
$58,590
$70,650
$82,710
$94,770
$106,830
$118,890
Note: Federal minimum wage employee working 50 weeks per year, 40 hours per week would earn $14,500.
PERSONSIN FAMILY 100% 133% 200% 300%
Premium Cap
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400%
9.5%
$45,960
$62,040
$78,120
$94,200
$110,280
$126,360
$142,440
$158,520
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Personal Responsibility
$31,321
$35,325
$47,100
$58,875
$70,650
$94,200
3%
4%
6.30%
8.05%
9.50%
9.50%
$78.30
$117.75
$247.28
$394.95
$559.31
$745.75
% of FPL
Family of 4INCOME
MAXIMUM %of INCOME
MAXIMUMMonthly Premium
Family of 4
133%
150%
200%
250%
300%
400%
Federal definition of affordability
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Remember That Group Coverage Remains a Valuable Benefit
People at 300% or more of the FPL are often key employees or family members in small businesses
Little or no subsidy will be available for them and comprehensive coverage in the reformed individual marketplace will be more expensive than existing coverage
Cancelling group coverage is likely to present the greatest burden on those most critical to your business
ARKANSAS BLUE CROSS and BLUE SHIELD
What Small Employers Need to Know
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Group Coverage: Considerations When groups cancel coverage, they are withdrawing a
form of compensation
To avoid employee dissatisfaction, groups may consider replacing some or all of the contribution amount made to the group health plan with additional income to the employee
By doing so, the group will have replaced a form of compensation that is tax deductible for both employer and employee with a form of compensation that is taxable for both
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