Health Insurance Quick Reference Guide

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Health Insurance

Quick Reference Guide

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Health Insurance Reference Guide

This Quick Reference Guide is designed to assist you to understand health insurance

information.

1. General Health Insurance Information

One of your key roles as Agents and kynectors is facilitating the application process for individuals and employers. In most instances, you are the initial point of contact when

individuals or employers begin identifying and purchasing health insurance plans. This requires that you interact with a number of Federal and local organizations.

A. kynect Stakeholders

The following provides high-level descriptions of the roles each organization identified in the figure below plays in the application process:

• Agents offer advice and work to match the health insurance needs of individuals or small businesses seeking coverage with the products and options available. They negotiate insurance contracts or policies, purchases, or sales in return for a fee or commission.

• kynectors help individuals and small businesses understand their insurance needs, consider different coverage options available, and assist in the enrolment process.

• The Department of Insurance (DOI) licenses and regulates Agents, monitors the financial condition of companies, educates individuals to make wise choices, and ensures that Kentuckians are treated fairly in kynect.

• Kentucky Office of the Health Benefit and Information Exchange (KOHBIE) has administrative responsibility for kynect, and it regulates kynectors and tracks registered Agents.

• The Federal Health Insurance Market helps to process payment assistance.

• The Department for Community Based Services (DCBS) processes and determines eligibility for Medicaid and KCHIP applications received from kynect. DCBS is part of the Cabinet for Health and Family Services (CHFS). DCBS also helps explain managed care to individuals eligible for Medicaid and allows individuals to choose a Managed Care Organization (MCO).

• The Department of Medicaid and Medicare Services (DMS) manages the policy for Medicaid and KCHIP and manages claims and services for Medicaid members.

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The figure below depicts the multi-step process of applying for and purchasing health care.

B. Role and Responsibilities of Agents and kynectors a. Agents

i. Insurance Agents are licensed and regulated by the Department of Insurance (DOI). Insurance Agents must be registered by KOHBIE to participate on kynect and are paid commissions by the insurance company with which they are appointed.

ii. Summary of Responsibilities for Agents:

• Represent a health insurance company to provide services for individuals or small businesses in the solicitation, negotiation, or procurement of insurance policies.

• Select and enroll individuals in Health Insurance Plans through kynect (unlike kynectors, who cannot enroll individuals in HIPs).

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• Offer advice and work to match the health insurance needs of individuals or small businesses seeking coverage with the products and options available.

• Help individuals apply for payment assistance (APTC). b. kynectors

i. kynectors help individuals and small businesses compare different coverage options available through kynect and facilitate enrollment.

ii. kynectors offer services in the following three areas:

• Outreach – Attend community events to raise awareness about kynect, how kynectors can help with enrollment through kynect, and the services available through kynect.

• Education – Provide information to individuals and small businesses regarding health insurance, insurance affordability programs, Health Insurance Plan selection and other services available through kynect.

• Enrollment Facilitation – Assist individuals, families, and small businesses with the online application process for health insurance plans, public programs, and insurance affordability programs.

iii. You can find a calendar of kynector events on healthbenefitexchange.ky.gov. These events may require kynectors to act as staffers and/or organizers. Refer to the Open Enrollment section below for details on when Agents and kynectors can expect to be more busy during the calendar year.

iv. The kynector program is a part of the Affordable Care Act (ACA) Navigator Program, In-Person Assistor Program, and Certified Application Counselor Program. Under the law, kynectors must:

• Facilitate selection of a Health Insurance Plan (HIP), maintain expertise in

eligibility, provide referrals to those individuals whom they cannot help, and provide services in a fair and impartial manner.

• Conduct outreach and education activities to help inform individuals of kynect, the ACA, and answer any questions they may have.

• Not have conflicts of Interest – To maintain impartiality and provide objective guidance to individuals, kynectors may not be health insurance issuers, stop loss issuers, subsidiaries of such issuers, lobby on behalf of issuers, or receive any compensation from issuers.

• Not make eligibility determinations and will not select Health Insurance Plans for individuals.

b. How do kynectors and Agents interact?

Depending upon the needs of the individual, Agents and kynectors may work together to provide an individual-friendly shopping experience. In some instances, a kynector might refer an individual to an Insurance Agent. Likewise, an Insurance Agent may refer an individual to a kynector.

c. Regulatory Compliance for kynectors and Insurance Agents

Below is an overview of required regulatory compliance for all Agents and kynectors. i. kynector and Insurance Agent Participation Agreements

a. kynectors and Insurance Agents must enter into a Participation Agreement with KOHBIE in order to participate. Please refer to Appendix D in the training manual for the kynector and Insurance Agent Participation Agreements.

ii. Privacy and Security When Handling Personal Information

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a. It is of the utmost importance and a legal requirement to always be aware of the privacy and security of handling individuals’ personal information. While

performing Agent and kynector duties, there is a high likelihood of being exposed to sensitive client information, or Personally Identifiable Information (PII). This personal information may include, but is not limited to:

• Full name (if not common)

• Date of birth

• Birthplace

• Social Security Number.

• Genetic information

• Individual’s health insurance policy number or subscriber ID number

• Any unique identifier used by a health insurer to identify the individual

• Any information in an individual’s application and claims history, including any appeals records

kynectors and Agents must handle this information carefully, not leaving it in public places or areas where others may be able to access it. Discarding of PII should be by shredder, not a trash can or recycling bin.

C. Qualified Health Plans/Health Insurance Plans

The Affordable Care Act (ACA) defines a Health Insurance Plan as an insurance plan that meets the criteria noted below:

1. Is certified by an Exchange

2. Provides essential health benefits (EHBs) or these Minimum Essential Coverage (MEC): i. Ambulatory patient services;

ii. Emergency services; iii. Hospitalization;

iv. Maternity and newborn care;

v. Mental health and substance use disorder services, including behavioral health;

vi. Prescription drugs;

vii. Rehabilitative and habilitative services and devices; viii. Laboratory services;

ix. Preventive and wellness services and chronic disease management; and x. Pediatric services, including oral and vision care.

3. Follows established limits on out-of-pocket spending (such as deductibles, copayments, and out-of-pocket maximums)

4. Meets other Commonwealth insurance and kynect requirements.

These plans must be certified by each Exchange on which they are sold. In Kentucky, the Department of Insurance approves plan rates, forms, and networks and KOHBIE certifies the plans before they are offered on kynect.

When interacting with individuals, please refer to Qualified Health Plans (QHPs) as

“Health Insurance Plans (HIPs)”.

Kentucky regulations require individuals under the age of 21 to have pediatric dental

benefits. If an individual is under the age of 21 and does not otherwise have dental coverage (as a dependent on a family’s plan, under a Health Insurance Plan, etc.), he or she will be required to obtain dental insurance. There are two ways to purchase the pediatric dental coverage via kynect:

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• Purchasing a stand-alone dental plan; or

• Selecting a Health Insurance Plan with dental coverage embedded in it. Out-of-pocket maximums may not apply to dental insurance. Individuals must examine an insurance plan’s schedule of benefits, brochures, or policy to determine if out-of-pocket maximums apply.

D. Metal Level & Catastrophic Plans

i. There are four standard metal level or “tiers”: Bronze, Silver, Gold, and Platinum. An additional Catastrophic level plan is available for those meeting special

circumstances. The main difference between these tiers is the amount the individual will spend on receiving care versus the amount that the insurance company will spend on providing care.

ii. This should not be confused with the benefits offered through the plans themselves. The benefits for each plan are defined by each individual issuer. Aside from essential health benefits, there are no set benefit levels for each plan tier. Therefore, two plans within the same metal level may have very different sets of benefits. These two plans, while different in the sets of benefits they provide, may cost the same amount to the individual. Similarly, two plans of different metal levels may have similar benefits. The difference between the two plans would be in how much the individual would depend on receiving these benefits and how much the issuer would spend. iii. Aside from those qualifying for a Catastrophic level plan, Bronze is the minimum

level of coverage required by law. Each metal plan is designed to pay a certain percentage of healthcare expenses for the average person or household. This percentage paid by the plan is called actuarial value. The following table shows the actuarial values associated with each metal level. These are defined by the ACA and must be adhered to by all plans sold on kynect.

Note: Generally, premiums will be higher as actuarial value increases; deductibles will be lower as actuarial value increases; and copays and coinsurance rates will be lower as actuarial value increases.

ACA Plan Coverage Levels – Actuarial Values

Coverage Level Actuarial Value (+/- 2%)

Bronze 60%

Silver 70%

Gold 80%

Platinum 90%

iv. The Catastrophic plan is available only for:

• Individuals under the age of 30 at the beginning of the plan year;

• Individuals with a hardship; or

o In order to purchase a catastrophic plan due to hardship, individials must show proof of hardship (which includes a certificate of exemption).

• Individuals without affordable coverage.

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o In order to purchase a catastrophic plan due to lack of affordable coverage, individials must show proof of hardship (which includes a certificate of exemption).

If these qualifications are met, individuals may purchase a Catastrophic plan with the coverage level set at the Health Savings Account (HSA) current law levels. However, 3 primary care visits are exempt from the plan’s deductible. This plan is available only in the individual market.

E. Health Insurance Costs Overview i. Out of Pocket Maximums

• All individuals and/or households that buy coverage via kynect will have a cap (maximum amount) placed on their total possible out-of-pocket spending.

• This out-of-pocket spending includes deductibles, co-pays and co-

insurance that will be paid by the individual. There are limits for individuals’ contribution toward these costs which are determined by the issuers when they design their plans.

• What do Out-of-Pocket Maximums mean to the individuals that I help? Out-of-Pocket Maximums are important to understand because they

determine the most that an individual will have to pay for healthcare in a plan year. Note that this out-of-pocket maximum is in addition to the premium that the individual will pay. Individuals should use this as a point of consideration when comparing two similar plans.

ii. kynect’s Pre-screening process allows individuals to shop for and compare insurance plans based on various factors such as cost, quality, and deductible rates. When working with individuals, kynectors can use the shopping tool to compare options and find plans that are relevant based on an individual’s preference. Although kynectors cannot suggest specific plans for individuals, they should inform individuals of their best options so that the individual can ultimately make a well- informed decision.

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1. kynect’s shopping capability allows individuals to compare plans depending on what is important to a given individual. Categories for comparing plans include cost, issuer options, and metal level options. kynectors can select the “Filter Options” tab and compare plans further

2. kynectors can filter plans by: monthly premium, quality, annual deductible, and out of pocket cost. Plans from various issuers will be available for viewing

Select desired metal plans

Select desired issuers Drag ranges to reflect

desired cost options

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i. Each plan will have a Summary of Benefit and Coverage (SBC) that explains what the plan covers and what it costs.

2. Financial Support Available

Key features of kynect are the affordability programs, including not only Medicaid and

Kentucky’s Children’s Health Insurance Program (discussed in the following chapter), but also Insurance Affordability Programs (IAPs), which include Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions. The programs are designed to help individuals purchase health insurance.

A. APTC/payment assistance

This payment assistance may be provided in advance or taken as a tax credit at the time an individual files their income taxes. This credit is only available through kynect. The tax credit cannot exceed the amount of the premium paid by the individual. Any

discrepancies will be reconciled in the year’s taxes.

i. When interacting with individuals, please refer to APTC as “payment assistance”, as referenced in kynect

ii. Payment assistance cannot be applied to individuals who are:

• eligible for Medicare, Medicaid, or KCHIP;

• enrolled in VA or TRICARE; or

• offered ESI.

iii. Payment assistance benefit amount is based on:

• household size;

• income level;

• ages of the HH members who need coverage; and

• the premium for the second cheapest Silver plan available within their region. An individual who wants a higher tier (Gold or Platinum) plan will not receive additional payment assistance for the incremental premium exceeding that of a silver plan.

iv. How to calculate payment assistance

Payment Assistance = Plan Premium – Annual Premium Limit Premium Limits for Individuals Based on Income

Income Annual Premium Limit

Up to 138% FPL 2% of income

138 - 150% FPL 3 - 4% of income

150 - 200% FPL 4 - 6.3% of income

200 - 250% FPL 6.3 - 8.05% of income

250 - 300% FPL 8.05 - 9.5% of income

300 - 400% FPL 9.5% of income

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v. Reconciliation

1. Tax credit cannot exceed the amount of the premium paid by the individual

2. kynectors should instruct individuals to use caution when selecting the amount of APTC applied during the initial shopping period. If 100% of APTC is applied and an income increase occurs, the individual may have to pay back the over applied APTC amount.

3. At the end of the year, the taxpayer’s payment assistance will be reconciled with what the taxpayer should have received (using actual household income and family size for the taxable year).

• If the payment assistance was less than the actual premium tax credit, the individual will receive an additional refund.

•

If the payment assistance was greater than the actual tax credit, the individual will owe the excess as an additional tax liability. This will be

included in their federal taxes.

vi. For an interactive calculator for payment assistance, please go to: http://healthbenefitexchange.ky.gov/Pages/Interactive-Calculator.aspx B.

Cost Sharing Reductions (CSR

)/Special Discount

Some individuals may qualify for cost sharing reductions. These reduce an individual’s out-of-pocket costs of the deductible, co-pay, and/or co-insurance. Based on the

individual’s FPL, the amount of cost sharing reduction the individual receives will impact their plan’s effective actuarial value (see table below). Special Discounts provide health insurance cost sharing assistance for individuals who are not eligible for Medicaid but whose income is between 100% and 250% of the FPL. Special Discounts are only available for Silver Plans purchased through kynect.

When interacting with individuals, please refer to CSR as “Special Discounts”, as referenced in kynect.

i. Below is an actuarial value table for silver plans.

Out-of-Pocket Maximum for Silver Plan Individuals Based on Income Level

Income Effective Actuarial Value

100 - 150% FPL 94%

150 - 200% FPL 87%

200 - 250% FPL 73%

Above 250% FPL 70%

All other metal level plans (Bronze, Gold and Platinum) will also have out-of-pocket maximums for each plan offered by the issuer. However, individuals will not receive special discounts on copays, co-insurance, and deductibles for these other metal level plans.

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ii. VA/TRICARE

Veterans health benefits and TRICARE are not available via kynect. They are included here to inform Agents and kynectors of other options for the individual they assist. The programs noted below meet minimum essential coverage requirements for many individuals. In this case, the fully covered individual will not be required to purchase additional coverage to meet the ACA mandate for individual minimum essential coverage.

a. If an individual chooses to cancel their VA health care enrollment, the individual may reapply for enrollment at any time; however, acceptance for future VA health care enrollment will be based on eligibility factors at the time of application, which may result in a denial of enrollment.

b. Individuals may drop TRICARE if they prefer to receive subsidized coverage through kynect, but they may not be able to re-instate for TRICARE at a later date.

C. Medicare/Medicaid

i. Medicare is a program enacted at the Federal level that provides health insurance for individuals 65 or older, individuals under 65 with certain

disabilities, or individuals of any age with end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant).

ii. Medicaid is a health and long-term care coverage program, jointly funded by state governments and the federal government. Every state establishes and administers its own Medicaid program and determines the type, amount, duration, and scope of services covered within broad federal guidelines. States are required to cover certain mandatory benefits and may choose to provide other optional benefits, as well.

a. The Modified Adjusted Gross Income (MAGI) methodology redefines household composition and how income is calculated using an individual’s tax household as the basis for the income calculations. b. Individuals enrolled in Medicaid will enroll in a MCO. Enrollment will

take place through kynect as part of the individual application process. If the individual does not select a MCO, kynect will select one for them automatically.

iii. For more information on Medicare/Medicaid and MAGI, please refer to the Eligibility and Income and Tax Quick Reference Guides.

Health Insurance Quick Reference Guide