Brad Wethington, CLU, ChFC, LUTCF - PowerPoint Presentation

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Brad Wethington, CLU, ChFC, LUTCFVice President – TPA Services

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Healthcare Reform - Between the Marketplace and the Employer Shared Responsibility

Friday, May 16, 2014Slide2

Agenda

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Update on FFM and SBM2014 Mid-year EnrollmentIndividual MandateEmployer Shared ResponsibilityQ&ASlide3

2014 Open Enrollment3

8 million enrollees

2.2M young adults (28 percent)2.7M between 0 and 34 (34 percent)85 percent qualified for subsidyIndiana: 132,423Last-minute surge:3.8M; 1.2M47 percent of total and 52 percent of young adults

Young adult enrollment doubledSlide4

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2014 Open Enrollment 5

98M website visits

33M calls to call centersAll States but One (Washington, DC) with State Exchange failed to meet Youth goal of 39 percent (considered minimum to keep premiums low)Wide variation by State, Ethnicity

California highest percentage of people (43 percent) eligible for marketplace enrollmentTop 12 states enrolled at least 30 percent of their eligible populations; bottom 17 states 20 percent or fewerOnly 400,000 Latinos of 10.2 million eligibleSlide6

Results6

Total enrollment on Exchange, through brokers & Medicaid expansion =

17.8MNo

data on how many were already insuredPercentage of adults without insurance reduced from 18 percent of the adult population (40M uninsured) to 15 percent (33M uninsured) – a reduction of 7.26M 7.26M new insureds result in Q12014 health spending growth of 9.9 percent – fastest in over thirty years:Increase in elective surgeriesIncrease in costly medicationsSlide7

Open Enrollment Still Open7

Birth or adoption of a child

Marriage, divorce

Losing eligibility on parent’s health plan upon turning 26Moving to a new area

Special Enrollment Period (i.e., through July 1) for COBRA eligible

Individuals whose individual market plans are renewing outside of open enrollment have 60 days from the renewal date to select QHP

60-day Special Enrollment period beginning 5/1 for those currently in a high-risk pool who have not purchased coverage through marketplaceSlide8

Enrollment Costs & Plans For 20158

Cost per uninsured enrollee between $5.42 and $25,000

State exchanges must be financially sustainable by end of 2015 when federal funding endsFFM States Contemplating SBM:New MexicoIdahoSBM States Contemplating FFM:Oregon and Maryland – already announced

Minnesota, Nevada, Massachusetts - consideringSlide9

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Individual Mandate10

2014

$95 per adult; $47.50 per child (up to $285 for family) or 1 percent of income, whichever is greaterFirst $10,000 exempt; $20,000 for familyPenalty pro-rated by the number of months without coverageNo penalty for single gap of less than 3 monthsHardship exemption for purchases made on or off exchange through

5/12015$325 per adult; $162.50 per child (up to $975 for family) or 2 percent of income, whichever is greaterSame rules apply as 2014 except (maybe) the hardship exemptionSlide11

Employer Shared Responsibility RulesAKA Employer Mandate

Final Rules Released February 10thRules Generally Take Effect 1/1/15Slide12

Important Changes from Rules Issued December, 2012Phase in employer requirements for smaller employers (i.e., <100 FT equivalent employees) until 1/1/16

<50 FTE equivalent still exemptTo be eligible, employer will have to go through a certification processSlide13

Certification ProcessDuring period beginning on 2/9/14, and ending on December 31, 2014, employer certifies they did not reduce the size of their workforce or the overall hours of service of its employees in order to satisfy the workforce size condition

Employees of entities that are part of controlled group still aggregated when determining if mandate enforcement appliesSlide14

Employee CountEmployer establishes 6 mo

period in 2014 to count employees for 2015If ER uses last few months as measurement period, Er will not have to have compliant plan in place until 4/1/15Slide15

Employer Shared ResponsibilityPenalties not assessed if offer coverage to at least 70 percent of FTE (increases to 95 percent in 2016)

Employer may still be subject to the “b” penalty of $3,000 per individual employee if an otherwise eligible employee who was not offered coverage does seek and obtain subsidized coverage through exchange

Choice to exclude certain classes of workers in order to fall under 70% coverage may be deliberate for 2014, as this transition relief was intended to make the transition to the 30 hours/week standard of offering coverage easier for employersSlide16

Additional RulesNon-calendar plans not required to comply until first renewal on-or-after 1/1/15 (applies to ERISA plan year defined in SPD)

No penalties to ER’s not offering coverage to dependents in ‘15 as long as they’re taking steps to offer in ‘16Slide17

Exempt EmployeesService hours of certain types of individuals not taken into consideration even if receiving some compensation (e.g., expense reimbursements):

Bona fide volunteerStudents participating in federal work-study program

Individuals who work for religious organizations who have taken vow of povertyRule provides detailed guidance on counting hours:Adjunct facultyPeople with on-call duty responsibility (e.g., medical personnel, people with layover hours like airline employees, commissioned sales people)Slide18

For More InformationNAHU:

http://newsmanager.commpartners.com/nahuw/issues/2014-02-11/index.htmlIRS: http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act

US Treasury Department:http://www.treasury.gov/press-center/press-releases/Documents/Fact%20Sheet%20021014.pdfSlide19

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Premium Subsidies

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Premium and Cost-Sharing Subsidies Under Health Reform[2]

Income

Required Premium Contribution

Actuarial value of coverage

Percentage of poverty line

Percentage of income

100 - 133%

2%

94%

133 - 150%

3-4%

94%

150 - 200%

4-6.3%

87%

200 - 250%

6.3-8.1%

73%

250 - 300%

8.1-9.5%

70%

300 - 350%

9.50%

70%

350 - 400%

9.50%

70%Slide21

Cost-Sharing Subsidy

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Maximum Liability

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<200% of FPL

$600200% to 300%$1,500300% to 400%$2,500>400%

UnlimitedSlide23

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Questions