State of Nebraska’s Health Insurance Exchange
A Presentation to the Public
September, 2012
Nebraska
Health Insurance Exchange Update
TODAY'S AGENDA
Section 1: Overview of Health Insurance Exchanges Section 2: Consumers and Exchanges
Section 3: Essential Health Benefits & Tax Credits
Section 4: Small Business Health Options Program (SHOP) Exchange Section 5: Nebraska’s Policy Assumptions & Next Steps
OVERVIEW OF HEALTH INSURANCE EXCHANGES
State of Nebraska: Exchange Overview
WHAT IS AN EXCHANGE?
A State-based insurance Exchange is a newly created
“marketplace” that will facilitate the comparison and
purchasing of health insurance for individuals and
small business employers.
The Exchange will certify state-licensed health plans to
be able to sell their commercial insurance products
through the Exchange. These health plans will be
“private” insurance plans and not state Medicaid.
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State of Nebraska: Exchange Overview
EXCHANGE IS SIMILAR TO A FARMER’S MARKET MODEL
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»
Brings together private health plans to a “common place”.»
Allows for basic and easy comparison of similar products.»
Makes health plans ultimately responsible for the quality of their products.»
Payment occurs at each health plan rather than a common cash register.State of Nebraska: Exchange Overview
Three viable options for Exchanges exist:
OPERATIONAL OPTIONS FOR EXCHANGES
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State-Federal Partnership Exchange
• State operates all activities, but can use federal services such as: • Premium tax credit
& cost sharing determinations
• Exemptions
• Risk adjustment program
• Reinsurance program
Federal Exchange
• State operates activities for:
• Plan Management
• Consumer Assistance
• Both Plan Management &
Consumer Assistance
• US Health & Human Services will
administer, operate and retain authority over all Exchange activities
State-based Exchange
• US Health & Human Services operates all activities
• Federal government has indicated that they would enter into an agreement for the state to carry out plan management on their behalf.
State of Nebraska: Exchange Overview
HOW WILL EXCHANGES WORK?
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Individuals contact Exchange
(via website or call center)
Small Employers (<50 employees)
Small Business Health Options Program (SHOP)
Exchange
• Qualified Health Plans
• Co-op
• Multistate Plan Medicaid
Exchanges will serve the individual and small employer markets differently
State of Nebraska: Exchange Overview
WHO CAN USE THE EXCHANGE?
» The Nebraska Exchange will become a marketplace for qualified
individuals and small employers to purchase health insurance:
› Individuals are qualified to use the Exchange if they meet certain
criteria including no access to other affordable insurance; and lawful
residence in Nebraska
•
Individuals that meet certain income guidelines will become eligible for federal insurance premium assistance (tax credits) providing they purchase a Qualified Health Plan offered through the Exchange› Small business employers are qualified if they employ up to 50
fulltime employees
•
Small employers that meet certain criteria will become eligible for a tax credit if they “join/contract with” the ExchangePage 8
CONSUMERS AND EXCHANGES
State of Nebraska: Exchange Overview
CONSUMERS AND EXCHANGES
Overview of Key Provisions:
»
Standardized application process»
Standardized way to compare health plans»
Essential benefits that all Exchange health plans are required to offer»
Qualified Health Plans will be held to specific requirements»
Provider quality data and health plan rating information will be available to assist in consumer decision-making process»
Consumer assistance programs› Toll-free telephone line
› Website
› Navigator / Assistor program and insurance brokers
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State of Nebraska: Exchange Overview
CONSUMER PROGRAMS
» Toll-free telephone line
› General health insurance coverage information
› Eligibility and enrollment (application intake and questions)
› Tax credit premiums, cost sharing, enrollment cards, provider network, billing, etc.
› Appeals and grievance guidance
› SHOP questions – from employers and employees
› Case updates (income changes, insurance status changes, address changes)
» Website
› Compare, select and purchase health coverage
› Access educational material regarding health insurance and health issues
» Navigator program and insurance brokers
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State of Nebraska: Exchange Overview
WHAT IS A NAVIGATOR?
»
At a minimum, the Patient Protection & Affordable Care Act (PPACA) requires that Navigators perform the following duties:• Conduct public education activities to raise awareness of health coverage available through the Exchange by Qualified Health Plans
• Distribute fair and impartial information about enrollment in Qualified Health Plans, the availability of premium tax credits and cost-sharing assistance in the Exchange
• Facilitate enrollment in Qualified Health Plans
• Provide referrals to consumer assistance programs or any other appropriate State
agencies to Exchange enrollees with grievances, complaints, or questions regarding their Qualified Health Plan, their coverage, or a determination made under such plan or
coverage
• Provide information in a manner that is culturally and linguistically appropriate to the needs of the populations being served by the Exchange
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State of Nebraska: Exchange Overview
WHO CAN BE A NAVIGATOR?
»
Regulations specify that the Exchange must select entities from at least two of the following categories to serve as Navigators:•
A community and consumer focused nonprofit group•
A trade, industry, and professional association•
A commercial fishing industry organization, ranching and farming organization•
Chambers of commerce•
Unions•
Resource partners of the Small Business Administration•
Licensed agents and brokers•
Other public or private entities or individuals that meet the requirements, such as Indian tribes, tribal organizations, urban Indian organizations, and State or local human service organizationsPage 13
State of Nebraska: Exchange Overview
PROPOSED NAVIGATOR PROGRAM APPROACH
»
Navigators are funded and accountable to the Exchange but are not directly employed by the Exchange»
Licensed brokers/producers that want to become Navigators, can use their existing license as their “certification”; however, they will be precluded from receivingcommissions from Qualified Health Plans
»
Navigators will be trained and qualified to perform Navigator functions; there will be no different tier or category levels»
Navigators will assist with the application process and facilitate the enrollment process (not offer input regarding which health plan an individual should select)»
The Exchange will develop and provide some of the outreach materials for Navigators»
Navigators will have access to a web portal designed exclusively for them to use and Navigators will also have a distinct telephone number when contacting the Service/Call CenterPage 14
State of Nebraska: Exchange Overview
ASSISTORS
» New Concept from the Federal Government
» Assistors are not “Navigators” and may have different rules and roles
that have yet to be fully defined by the federal government.
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State of Nebraska: Exchange Overview
THE EXCHANGE AND THE ROLE OF THE BROKER
» The State’s role in licensing agents and brokers is not changed by the
Patient Protection & Affordable Care Act (PPACA)
» State Exchanges may permit agents and brokers to:
› Enroll individuals, employers or employees in any Qualified Health Plan in the individual or small group market
› Enroll qualified individuals in a Qualified Health Plan in a manner that constitutes enrollment through the Exchange
› Assist individuals in applying for advance payments of the premium tax credit and cost-sharing reductions for Qualified Health Plans
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State of Nebraska: Exchange Overview
THE EXCHANGE AND THE ROLE OF THE BROKER
» Agents and brokers must “register” with the Exchange in advance of
assisting qualified individuals enrolling in Qualified Health Plans:
› Complete all training that may be required by the Exchange regarding the Qualified Health Plans, tax credits and cost-sharing reductions
› Comply with all Exchange privacy and security standards
› Comply with all marketing standards that federal or state rules require
› Ensure the applicant’s completion of an eligible verification and enrollment application through the Exchange website
› Allow the Exchange to transmit the enrollment information to the Qualified Health Plan issuer
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State of Nebraska: Exchange Overview
THE EXCHANGE AND THE ROLE OF THE BROKER
» When a website of the agent or broker is used to complete the
Qualified Health Plan selection, at a minimum the website must:
› Meet all standards for disclosure and display of Qualified Health Plan information
› Provide consumers the ability to view all Qualified Health Plans offered through the Exchange
› Not provide financial incentives, such as rebates or giveaways
› Display all Qualified Health Plan data provided by the Exchange
› Maintain audit trails and records in an electronic format for a minimum of ten years
› Provide consumers with the ability to withdraw from the process and use the Exchange website instead and at any time
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State of Nebraska: Exchange Overview
EXCHANGE NAVIGATORS AND BROKERS
» Exchange Navigators will be individuals or entities that will be
responsible for educating consumers about the Exchange and the
health coverage options offered by the Exchange. Some of the
requirements include:
› Maintain expertise in eligibility, enrollment, and program specifications and conduct public education
› Provide information and services in a fair, accurate and impartial manner
› Facilitate enrollment of a Qualified Health Plan
› Provide referrals to any applicable office of insurance consumer assistance (grievance, complaint, or question about their plan, coverage or a determination under such plan)
› Provide information in a manner that is culturally and linguistically appropriate and ensure access for individuals with disabilities
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State of Nebraska: Exchange Overview
EXCHANGE NAVIGATORS AND BROKERS
» Agents and brokers can become Navigators providing they:
› Meet Navigator training requirements
› Meet the minimum duties required by the federal and state rules
› Meet the Conflicts of Interest standards (not yet determined)
› Receive no compensation (directly or indirectly) from health insurers
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ESSENTIAL HEALTH BENEFITS & TAX CREDITS
State of Nebraska: Exchange Overview
OVERVIEW OF ESSENTIAL HEALTH BENEFITS
»
The Patient Protection and Affordable Care Act (PPACA) requires health insurance plans sold to individuals and small employers to provide a minimum package of services in 10 categories called “Essential Health Benefits”.»
Essential Health Benefits are the minimum standard to be applied both inside and outside Exchanges. They include:› Ambulatory patient services
› Emergency services
› Hospitalizations
› Maternity and newborn care
› Mental health and substance use disorder services, including behavioral health
› Prescription drugs
› Rehabilitative and habilitative services and devices
› Laboratory services
› Preventive and wellness services and chronic disease management
› Pediatric services, including oral and vision care
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State of Nebraska: Exchange Overview
ESSENTIAL HEALTH BENEFITS & THE EXCHANGE
» Individuals and small employers may purchase health coverage
offered through either the Exchange or an insurer outside the
Exchange.
» All insurers (whether selling inside or outside the Exchange) will be
subject to the same rules, including standardized benefit packages
that contain the essential health benefits.
» The Patient Protection & Affordable Care Act (PPACA) includes
provisions to lower premiums and cost-sharing obligations for people
with lower incomes as long as they purchase insurance through the
Exchange
› Individuals with incomes between 100% and 400% of poverty are eligible for a tax credit to reduce the cost of coverage
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State of Nebraska: Exchange Overview
WHO IS ELIGIBLE FOR PREMIUM TAX CREDITS?
» Individuals who purchase insurance through the Exchange and whose
income is 100- 400% of the federal poverty level (but not eligible for
Medicaid) may be eligible for a tax credit to help pay the cost of
coverage
› Individuals eligible for the tax credit (incomes between 100-400% poverty level) cannot have access to employer-sponsored insurance
› Exception: if the employee’s required premium contribution for their employer’s insurance exceeds 9.5% of the employee’s income it is considered unaffordable
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State of Nebraska: Exchange Overview
HOW IS THE TAX CREDIT CALCULATED?
» The amount of the tax credit is based on the premium for the second
lowest cost “silver” plan in the Exchange
› A “silver” plan provides the essential health benefits and has an actuarial value of 70%
› The amount of the tax credit varies with income – the premium would not exceed a specified percentage of their income (adjusted for family size), as follows:
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Income Level Premiums as a Percent of Income
100-133% FPL 2% of income
133-150% 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
SMALL BUSINESS HEALTH OPTIONS PROGRAM
(SHOP) EXCHANGE
State of Nebraska: Exchange Overview
SHOP EXCHANGES
»
The Patient Protection and Affordable Care Act (PPACA) requires states to create Small Business Health Options Programs (SHOP) if the state chooses to build a HealthInsurance Exchange
»
SHOP is designed to help small employers access affordable insurance for their employees (2-50 employees)»
The law allows states to combine SHOP with the individual Exchange. Under the law, states will assist small employers in enrolling their employees in private healthinsurance plans
»
Premiums will vary only by geography, age and whether or not an insured person uses tobaccoPage 27
State of Nebraska: Exchange Overview
FINAL RULE ON SHOP EXCHANGES
» In March, 2012, US Dept. of Health & Human Services published a final
rule on SHOP which includes:
SHOP will allow employers to choose the level of coverage they will offer and offer the employees choices of all qualified health plans within that level of coverage
Employers can offer coverage from multiple insurers, just like larger companies and government employee plans, but get a single bill and write a single check
SHOP Exchanges can allow employers to select a single plan to offer employees
States can set the size of the small group market at either 2 to 50 or 1 to 100 employees until 2016. In 2016, employers with between 1 and 100 employees can participate in a SHOP. And, starting in 2017, states have the option to let businesses with more than 100 employees buy large group coverage through the SHOP.
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State of Nebraska: Exchange Overview
SELECTION AND CERTIFICATION REQUIREMENTS
» A SHOP Exchange must certify that each insurance plan meets
minimum federal requirements as a “qualified health plan” and
complies with other requirements including:
Charging the same premium rate for a plan regardless of whether it is offered through the SHOP exchange, direct to consumer, or via agents
Compliance with quality improvement standards (reporting, enrollee satisfaction, etc.)
Compliance with marketing practices that do not discourage enrollment of people with significant health needs
» Nebraska will likely allow all plans that meets the minimum certification
requirements to be an option on the SHOP Exchange.
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State of Nebraska: Exchange Overview
EXCHANGE PREMIUM BILLING FOR SHOP
» SHOP will administer a streamlined premium billing and
collection system. SHOP will prepare and issue a single
bill to each participating employer that reflects premiums
owed for all plans in which its employees are enrolled.
» The employer will then make a single payment to the
SHOP, and the SHOP will pay the various plan issuers.
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State of Nebraska: Exchange Overview
TAX SUBSIDY FOR SMALL EMPLOYERS
» Starting in 2014, small employers purchasing coverage through a SHOP
might be eligible for a tax credit of up to 50 percent of their premium
payments if they:
Have 25 or fewer employees
Pay employees an average annual wage of less than $50,000
Offer all full-time employees coverage
Pay at least 50 percent of the premium cost
» The credit is available for two years (non-profit employers meeting the
eligibility criteria can receive credit for 35 percent of their premium
payments).
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NEBRASKA’S POLICY ASSUMPTIONS AND
NEXT STEPS
State of Nebraska: Exchange Overview
• Exchange will be operated as a Division within the Nebraska
Department of Insurance.
• There will be a single Exchange that serves both the individual and
small employer markets; however, the risk pools will remain
separate.
• All Exchange “certified” health plans will be able to sell within the
Nebraska Exchange. The Exchange will not limit the number of
Qualified Health Plans.
• Exchange Service & Call Center will be located and staffed in
Nebraska.
NEBRASKA EXCHANGE POLICY ASSUMPTIONS
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State of Nebraska: Exchange Overview
WHAT YOU NEED TO KNOW ABOUT EXCHANGES
»
Since most Americans will be required to have health insurance, you need to know your options:› Does your employer offer you insurance? Is it affordable?
•
Affordability is measured by making sure your annual premium does not exceed about 9.5% of your annual income› What is your income level and do you qualify for financial assistance for the cost of your monthly insurance premium?
•
If your income is 100% to 400% of the federal poverty level, you will benefit from a tax credit toward your monthly premium; in addition, if your income is between 100% and 250% you may qualify for cost-sharing reductions› The Exchange will begin enrolling qualified individuals in October 2013
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State of Nebraska: Exchange Overview
NEXT STEPS – AWAITING FUTURE GUIDANCE
Areas requiring more information and future guidance:
» New rules after Supreme Court of the United States ruling
Is “No wrong door” still valid?
What is the definition of Medicaid “expansion” and what effect does that definition have on the operations of the Exchange?
» Risk Adjustment, Risk Corridors, and Reinsurance
» Regulation on Essential Health Benefits – Only a bulletin has been
issued to date
» Final guidance regarding Federal Exchange
» Over 200 mentions of forthcoming guidance
• Appeals Process
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State of Nebraska: Exchange Overview
› Continue to study the Scope of Supreme Court decision
› Wait for more federal regulations and guidance while we plan to
implement a State-based Exchange
› Continue to design the IT infrastructure that is required to establish
an Exchange
› Continue to welcome input from all parties
NEXT STEPS
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State of Nebraska: Exchange Overview
CONTACT INFORMATION
» Nebraska Department of Insurance:
» Phone:402-471-2201
» Email: jp.sabby@nebraska.gov
» Website:
http://www.doi.ne.gov/healthcarereform/exchange/index.htm
» Facebook: http://www.facebook.com/pages/Nebraska-
Department-of-Insurance-Exchange-Planning-
Division/104284246313073
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