Exchanges and the ACA—
What You Need to Know for 2014
How the Affordable Care Act affects the Individual Health Insurance Market
This presentation is for informational purposes only and does not constitute legal advice. These materials are intended but not promised or guaranteed to be current and complete. Rules and regulations continue to be released that may change this information.
Key Reform Highlights
• The Affordable Care Act (ACA) establishes the Health Insurance Marketplace (public exchange)
• Requires Large Employers (51 or more total employees) to provide health insurance or be subject to penalties
• Encourages Small Employers to provide health insurance through tax credits
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Key Reform Highlights
• Increases access to affordable health care
• Requires individuals to have qualified health insurance or pay a penalty
• Requires health plans to provide coverage meeting certain cost-sharing thresholds and covering certain benefits
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Making a Difference
• 17 million children cannot be denied coverage due to a preexisting condition.
– In 2014, 129 million Americans with preexisting
conditions cannot be denied coverage or charged more.
• 6.6 million young adults have coverage through a parent’s plan.
– This includes 3.1 million currently uninsured. The
provision allows young adults to stay on a parent’s plan until age 26.
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Making a Difference
• Insurance companies can no longer drop coverage for members.
– For example, without the ACA, some insurance companies could continue to cancel coverage for a sick person based on a paperwork mistake.
• 6.1 million seniors on Medicare saved more than $5.7 billion on prescription drugs.
• Put an end to lifetime dollar limits in 2010.
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Shopping for Health Insurance Online
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Exchange
Exchanges
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• In general, references to exchanges mean:
– An online marketplace where individuals and employees of small groups go to
• Shop for health care coverage.
• Determine eligibility for premium and cost-sharing assistance.
• Purchase health care coverage.
• Also called the Health Insurance Marketplace.
• Other acronyms: HIX, public exchange, exchange
• Public exchanges will have more than one insurance carrier option.
Access to Affordable Care
• Guaranteed issue (take everyone)
– Insurance can’t deny based on medical history/illness
• Can only rate on
– Age
– Geography – Tobacco use – Family size
• Guaranteed renewal (renew everyone)
• Coverage for people with preexisting conditions 8
Access to Affordable Care
• Affordability Programs
– Limit total premium for family coverage to include premiums for no more than the three oldest
children (under age 21)
– Premium assistance and cost-sharing reductions – People who meet income thresholds and don’t
have other qualified insurance coverage can get financial help
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Access to Affordable Care
• Premium Assistance
– Advance premium tax credits lower the monthly premium amount a person pays throughout the year.
– Incomes between 100% and 400% of Federal Poverty Level (FPL) enrolled in a Qualified Health Plan (QHP) on the public exchange.
» 100% = ($11,490 individual and $23,550 family of four in 2013)
» 400% = ($45,960 individual and $94,200 family)
– An individual may not receive a premium tax credit if
he or she is eligible for employer-sponsored plan that is: (a)
“affordable” and (b) has an actuarial value of at least 60%.
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Access to Affordable Care
• Cost-Sharing Reductions
– Reduces out-of-pocket costs such as deductibles, copayments and coinsurance
– People with incomes between 100% and 250% of FPL
enrolled in a QHP on the public exchange (must enroll in a Silver plan).
» 100% = ($11,490 individual and $23,550 family of four in 2013)
» 250% = ($28,725 individual and $58,875 family)
– An individual may not receive a premium tax credit if
he or she is eligible for employer-sponsored plan that is: (a)
“affordable” and (b) has an actuarial value of at least 60%. 11
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Individual Mandate
• Requires U.S. citizens and legal residents to have qualifying health coverage or pay a penalty, with some exceptions:
• Financial hardship
• Religious objections, American Indians, undocumented immigrants, those who are incarcerated
• Those without coverage for less than two months
• Those with the lowest-cost plan option exceeding 8% of individual’s income or income below tax filing threshold ($9,350 individual/$18,700 couples)
Individual Mandate
Individuals pay tax penalties if they don’t have creditable coverage (the greater of either):
• 2014: $95 per adult
• 2015: $325 per adult
• 2016: $695 per adult
• OR, percentage of household income: 1% in 2014, 2% in 2015, 2.5% in 2016 and after.
Penalty is half the adult amount for children under age
18. Household penalty capped at 3 times the adult rate, no matter how many children you have.
Health Plans
• Requires health plans to meet certain insurance market rules.
• Cover at least 60% of the benefit costs of the plan
• Cover certain Essential Health Benefits
Qualified Health Plans
*70% AV = Plan pays 70% of a standard population’s expected medical expenses for Essential Health Benefits.
On- and off-exchange plans must meet minimum Bronze level to be “Qualified.”
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Metal Tier Actuarial Value (AV) +/- 2%
Bronze 60%
Silver 70%*
Gold 80%
Platinum 90%
Essential Health Benefits
• QHPs provide Essential Health Benefits in 10 categories plus existing State Mandates.
– Ambulatory patient services – Emergency services
– Hospitalization
– Maternity and newborn care – Infertility services
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Essential Health Benefits
– Mental health and substance use disorder services, including behavioral health treatment
– Prescription drugs
– Rehabilitative services and devices – Laboratory services
– Preventive and wellness services and chronic disease management
– Pediatric services, including oral and vision care
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Taxes
• More than 60 taxes included in the ACA
– PCORI
– Health Insurer Tax
– Transitional Reinsurance Fee
• Analysis by Oliver Wyman estimates the Health Insurer Tax alone “will increase
premiums in the insured market, on average, by 1.9% to 2.3% in 2014,” and by 2023 “will increase premiums 2.8% to 3.7%.”
What Does This Mean?
• You must have qualified coverage or pay a penalty.
• You may be eligible for premium and cost-sharing assistance.
– To receive premium or cost-sharing assistance, you must enroll through the Public Exchange.
– You can still enroll in a My Health Alliance plan if you are eligible for either.
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What Does This Mean?
• Members can keep their coverage.
• Your plan will change.
– My Health Alliance will have all new individual plans in 2014.
– We will automatically move you to the most similar qualified plan.
– All plans will include Essential Health Benefits, like maternity, prescription coverage and pediatric dental
and vision coverage. 21
How Much Will You Pay?
• Your premiums will change.
– Individuals will have different premium changes based on age, tobacco use and geographic area.
– In most states, age-rating restrictions will make premiums more expensive for younger adults and less expensive for older adults.
– Costs will shift, too, because plans can no longer charge different premiums based on gender.
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How Much Will You Pay?
• Here are the Influences on premium increases.
– Additional taxes to fund ACA requirements
– No underwriting means guaranteed acceptance, regardless of health status
– Inflation– normal rise in costs from year to year for doctor and hospital services, new technology and more prescription use
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What Do You Need to Do?
• Watch for your My Health Alliance renewal notification to arrive in the mail by late
September.
• Review the benefits.
• Use our premium charts to find what you’ll pay each month for your new plan.
• Ask questions if you don’t understand.
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What Do You Need to Do?
My Health Alliance members have three options.
1. Do nothing.
2. Make a plan change.
3. End coverage.
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You Could
1. Do Nothing
• If your new My Health Alliance plan is a good fit, you don’t have to do a thing.
• Your new benefits and new premium will begin January 1, 2014.
• You will be in compliance with ACA requirements.
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You Could
2. Make a Plan Change
• Consider past (or future) claims.
– See your claims history at YourHealthAlliance.org.
• Explore other My Health Alliance plans.
• Call your broker.
• Call or stop by Health Alliance.
• Complete a Plan Change Form.
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You Could
3. Terminate Coverage
• Talk to your broker or My Health Alliance to be sure this is the “right” choice for you.
• Terminate policy in writing by December 15, 2013 by completing a Plan Termination Form.
• Remember, if you go without coverage, you could have to pay penalty.
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Enrollment Periods
• You will only be able to enroll or change your plan during certain times of the year, unless you have a Special Enrollment Period.
– October 1, 2013, to March 31, 2014 (for January 1, 2014, to May 1, 2014, effective dates)
– Applications received before December 15, 2013, have a January 1, 2014, effective date.
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Enrollment Periods
– December 15, 2013, to March 31, 2014
• Days 1 to 15, effective the first day of following month.
• Days 16 to end of month, effective first day of the second following month.
• Annual Enrollment Period (AEP)-for 2015 effective date
– October 15, 2014, to December 7, 2014 – For January 1, 2015, effective dates.
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Important Dates What’s Happening? What It Means?
10/1/13 Enrollment begins You can renew your plan or explore your options for 2014.
Before 12/15/13 Enroll or make plan change. Coverage starts 1/1/14.
12/16/13-–1/15/14 Enroll or make plan change. Coverage starts 2/1/14.
1/16/14–2/15/14 Enroll or make plan change. Coverage starts 3/1/14.
2/16/14–3/15/14 Enroll or make plan change. Coverage starts 4/1/14.
3/16/14–3/31/14 Enroll or make plan change. Coverage starts 5/1/14.
3/31/14 Enrollment closes.
Unless you have a “qualifying event,” you can no longer make a plan change or enroll in a new plan.
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We’re ready to help. Contact Us.
• To learn more about our plans or enroll
– Call us. 1-888-382-9771
– Visit us. MyHealthAlliance.org
• Current members
– Call or visit your broker.
– Call us. 1-866-247-3296
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Questions ?
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