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Nebraska Health Insurance Exchange Update

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(1)

Affordable Care Act Implementation

March 2013

Nebraska

(2)

IMPLEMENTATION TIMELINE

2010 2011 2012 2013 2014 2015 2016 2017

Temporary High Risk Pool Program

Immediate Reforms:

•No Lifetime Limits

•Restricted Annual Limits

•Restrictions on Rescission

•First Dollar Coverage of Preventive Services

Medical Loss Ratios with Rebates

2010 2011 2012 2013 2014 2015 2016 2017

Exchanges Subsidies

Individual/Employer Mandates

Market Reforms

•Guaranteed Issue

•No Pre-Existing Condition Exclusions for Adults

•Rating Rules

•Essential Benefits Plans

•No Annual Limits for Essential Benefits

Risk Adjustment

•Extended Dependent Coverage

•Internal/External Review

•No Pre-Existing Conditions for Children

•Disclosure of Justifications for Premium Increases

Individual Market Reinsurance Program & Risk Corridors

Temporary Reinsurance Program For Early Retirees

(3)

UPCOMING DEADLINES OF NOTE

»

Exchanges:

› Carriers begin submitting federal Exchange applications: April 1, 2013 › All federal Exchange applications due: April 30, 2013

› State certification complete: July 31, 2013 › Carriers notified: September 4, 2013

› Exchange sales begin October 1, 2013

»

Market Rule Gives States until March 29th to Request:

› Family Tiers; Rating Areas; Age Ratio; Age Curve; Tobacco Ratio › Merging of Small Group and Individual Markets

(4)

State of Nebraska: Exchange Overview

RECENT REGULATIONS

»

Market Reform Regulations

› 2014 Market Reforms

»

Essential Health Benefit/Accreditation/Actuarial Value Regulations

› Final EHB Benchmarks; AV Calculations; Accreditation Requirements

»

Notice of Benefit and Payment Parameters

› Risk-Sharing Payments; MLR Adjustments; Exchange Funding

»

Multi-State Plan Regulations

› Office of Personnel Management Requirements

»

Plus, Annual Letter, which outlines what is required of Qualified Health Plans in federal Exchanges

(5)

WHAT WE ARE WAITING FOR?

»

Final SHOP Exchange Regulations

»

Navigator Guidance and Funding Opportunity

Announcement

»

Enforcement Determinations

(6)

State of Nebraska: Exchange Overview

Preemption

Provisions of PPACA can potentially preempt state laws » Similar to HIPAA:

» States can go beyond federal rules, but if a state’s laws or regulations prevent a federal law from being implemented, then that law or reg is preempted

» Assumption is that the state will enforce federal rules

Nothing in this title shall be construed to preempt any State law that does not prevent the application of the provisions of this title.

(7)

ENFORCEMENT ANALYSIS

Does plan cover mental health? Yes, per state law No Plan satisfies state law. Federal law applies Plan violates state law. Federal law does not apply

Does plan apply same terms and conditions?

Yes

Plan is in compliance with state and

federal law

No, plan caps benefits, per state law Plan violates Federal law State law preempted. HHS ENFORCES

(8)

State of Nebraska: Exchange Overview

HEALTHCARE REFORM – SO FAR

»

September 23, 2010 Immediate reforms:

› No lifetime limits and restricted annual limits › Internal and external review standards

› Guarantee issue for children under age 19 › Child coverage up to age 26

› Coverage of preventive benefits (contraceptive issue)

»

Temporary High-Risk Pools (enrollment suspended Feb 2013)

»

Rate Review Standards (rate increases 10%+ reviewed)

»

Medical Loss Ratios with Rebates

(9)

2014 MARKET REFORMS

For Small Group and Non-Group Coverage Sold or

Renewed on or after 1/1/2014:

»

Guaranteed Issue

»

No Pre-Existing Condition Exclusions

»

Adjusted Community Rating & Single Risk Pool for Each Market

»

Essential Health Benefits & Cost-Sharing Must Meet Actuarial Value Levels

(10)

State of Nebraska: Exchange Overview

ADJUSTED COMMUNITY RATING

» For the Small Group and Non-Group Markets:

> No rating based on health status

> Maximum age variation of 3:1 (ages 21-64)

> Maximum variation based on tobacco use of 1.5:1

> Actuarially justified variation based on geographic areas (state may set areas) > Family rates built up based on age and tobacco use of each member

»

Plus, single risk pool in small group market and individual market (except for grandfathered plans)

»

This will significantly impact rates for younger/healthier enrollees in most states.

(11)

ME NY PA NH CT VT MA NJ VA NC SC GA FL WV KY AL MS MI WI MN IA HI AK KS NE ND SD MO

IL IN

TX MT ID NV UT WY CO NM AZ CA OR WA LA AR OK OH MD DE RI Community Rating

25.1:1 or greater

DC

Adjusted Community Rating

Rating Band Variability:

No Rating Structure 19.1:1 – 25:1 13.1:1 – 19:1 13:1 or less

*Note: Michigan HMOs and Blue Cross/Blue Shield are restricted to 3.12:1 maximum variation.

All others may use 3.96 maximum variation

TN CURRENT SMALL GROUP MARKET

Note: Nebraska is preempted on rating and will be 3:1

(12)

ME NY PA NH CT VT MA NJ VA NC SC GA FL WV KY TN AL MS MI WI MN IA HI AK KS NE ND SD MO

IL IN

TX MT ID NV UT WY CO NM AZ CA OR WA LA AR OK OH MD DE RI Rating Bands Hybrid

Michigan Blue Cross/Blue Shield must use community rating. There is no rating structure for other carriers.

Current Individual Market

DC

Adjusted Community Rating Community Rating

(13)

Benefit Design & Cost-Sharing

» Individual and small group plans must include Essential Health

Benefits (EHBs). Large group and self-insured plans may not

have annual or lifetime limits on EHBs.

» EHBs based on “benchmark” plan in each state

» Cost-sharing levels:

> Bronze = 60% actuarial value

> Silver = 70% actuarial value

> Gold = 80% actuarial value

> Platinum = 90% actuarial value

> Catastrophic Plan (limited to young and those without affordable

(14)

State of Nebraska: Exchange Overview

PLAN TRANSPARENCY

» Plans must submit a justification for

any

premium increase prior

to implementation and post on website

» Plans must disclose to the public:

› Claims payment policies and practices › Periodic financial information

› Data on enrollment and disenrollment › Number of claims denied

› Rating practices

› Cost-sharing and payments for out-of-network coverage › Enrollee rights under PPACA

(15)

Grandfathered Plans

» Coverage in which individuals were enrolled prior to March 23,

2010 are exempt from most provisions of the bill.

Provisions that DO Apply:

> Lifetime limits

> Restrictions on rescissions

> Extension of dependent coverage > Medical loss ratios

> Annual limits (group only)

> Preexisting condition exclusions (group only)

» Grandfather Status Can Be Lost

» Pooled separately from newly sold plans.

> State laws that attempt to include them in single risk pools are preempted.

(16)

State of Nebraska: Exchange Overview

ENFORCEMENT

(a) STATE ENFORCEMENT

1) STATE AUTHORITY.—Subject to section 2723{2724}, each State may require that health insurance issuers that issue, sell, renew, or offer health insurance coverage in the State in the small or large group markets individual or group market meet the requirements of this part with respect to such issuers.

2) FAILURE TO IMPLEMENT PROVISIONS.—In the case of a

determination by the Secretary that a State has failed to substantially enforce a provision (or provisions) in this part with respect to health insurance issuers in the State, the Secretary shall enforce such

provision (or provisions) under subsection (b) insofar as they relate to the issuance, sale, renewal, and offering of health insurance coverage in connection with group health plans or individual health insurance coverage in such State.

(17)

State of Nebraska: Exchange Overview

ENFORCEMENT

»

Options for Enforcement of 2014 Market Reforms

› Amend state rules to meet minimum federal standards

› Use general authority (form review, rate review, unfair trade practices) to enforce federal rules

› Enter into a “Collaborative Enforcement Agreement” with CCIIO under which the state reviews for compliance, but CCIIO uses federal penalties

› State enforces state rules; CCIIO enforces federal rules

› Nebraska has provision that states that policies must conform to state and federal law.

»

Letter sent to commissioners on Feb 15 outlining where CCIIO

believes state enforcement authority exists – most states assumed to have authority

»

Nebraska has been deemed a plan management marketplace and will enforce 2014 market reforms

(18)

State of Nebraska: Exchange Overview

SERFF AND TEMPLATE ASSISTANCE

»

EHB Validations

»

Substitution of Benefit Evaluation

»

A/V and Cost Sharing Validations

»

Single-Risk Pool for Plans in each Mkt

»

Age-Band, Tobacco, Geography, and Family Size Analysis

»

Accreditation

»

Network Adequacy

(19)

FEDERAL ENFORCEMENT ACTIONS

»

Penalties

› The maximum amount of penalty imposed under this paragraph is $100 for each day for each individual with respect to which such a failure occurs

› No penalties if “reasonable diligence” found › Administrative review

› Judicial review

(20)

State of Nebraska: Exchange Overview

Individual Mandate

Penalties

2014

2015

2016

$95 per adult up to $285 or 1% of household income, whichever is higher

$395 per adult up to $885 or 2% of

household income, whichever is higher $695 per adult up to $2,085 or 2.5% of household income, whichever is higher

Penalty for a child is ½ that of an adult

Penalties indexed to the growth of CPI after 2016

Individuals required to have minimum qualified

(21)

Individual Mandate

IRS is prohibited from filing liens or

charging interest for penalties. No fines or criminal charges for nonpayment.

Exemptions:

Cost of coverage is more than 8% of household income

Religious objection

(22)

State of Nebraska: Exchange Overview

EMPLOYER RESPONSIBILITIES

»

Employers over 200 employees must auto-enroll with opt-out

»

Employers with more than 50 employees fined if employees qualify for subsidies because cost of coverage for employee exceeds 9.5% of income of employee

> Penalty is $3,000 per employee receiving subsidy up to $2,000 times number of employees

(23)

THE EXCHANGES (MARKETPLACES)

» Individual Exchange:

› Provides information on subsidies and Medicaid eligibility

» Small Group (SHOP) Exchange:

› For small employers 1-100 (“1” defined as employer and one employee) – 70% participation rate allowed in federal SHOP

› State may elect to define as 1-50 until January 1, 2016

› Employer may choose coverage level and allow employees to choose from carriers offering at that level beginning in 2015

› Exchange collects and combines premiums and sends to carriers beginning in 2015

(24)

State of Nebraska: Exchange Overview

EXCHANGE OPTIONS

»

Federally Facilitated Exchange

› Feds set standards and operate the Exchange

› State maintains oversight of health plans and may coordinate with the federal Exchange

› Grant funds available to states for coordination costs › Plans charged 3.5% of premium per month

»

Partnership

› Feds operate Exchange, but state makes many key decisions and may do plan management and/or some consumer assistance

(25)

EXCHANGE OPTIONS

»

Plan Management Market Place

› Letter of Intent from DOI ASAP that the state will fulfill QHP certification functions and/or consumer assistance functions

› Plans need only submit to state regulator › Grant funds available

»

State Exchange

› State operates Exchange

› Determining eligibility for subsidies optional

(26)

State of Nebraska: Exchange Overview

FUNDING OPTIONS

»

Exchange Establishment Grants

› Changed the scope of the Establishment grant to work with the federally facilitated exchange

› Last deadline for application: Oct 2014

»

Rate Review Grants

› Must be related to rate review process › Applied for a second rate review grant

(27)

EXCHANGE FUNCTIONS

At a minimum, an Exchange must:

» Implement procedures for certification,

recertification, and decertification of health plans.

» Operate toll-free hotline.

» Maintain Internet website with standardized info.

» Assign a rating to each plan.

» Utilize standardized format for presenting options.

» Inform individuals of eligibility for Medicaid, CHIP or other applicable

state or local public programs.

(28)

State of Nebraska: Exchange Overview

EXCHANGE FUNCTIONS

(CONTIN UED )

» Make available a calculator to determine

the actual cost of coverage after subsidies.

» Grant a certification attesting that the individual is

not subject to the coverage mandate because:

› there is no affordable option available, or › the individual is exempt from the mandate.

» Transfer to the Treasury a list of exempt individuals and

employees eligible for tax credit.

» Provide to each employer the name of employees eligible for tax

credit.

(29)

PLANS AVAILABLE IN EXCHANGE

»

Qualified Health Plans

»

Stand-Alone Dental Plans

»

CO-OP Plans

(30)

State of Nebraska: Exchange Overview

QUALIFIED HEALTH PLANS

At a minimum QHPs must:

1. Be licensed and provide Essential Health Benefits

2. Offer at least one Silver (70%) and one Gold (80%) plan 3. Charge same price in and out of Exchange for same plan 4. Meet marketing requirements (state rules in 2014-15)

5. Meet network adequacy requirements (state rules in 2014-15) 6. Include essential community providers in network

7. Be accredited by organizations recognized by Secretary 8. Implement quality improvement strategies (2016)

9. Utilize uniform enrollment form and standard format for presenting plan options Note: HHS and/or States could impose additional certification requirements.

QHPs may be sold off Exchange.

(31)

APPROVAL OF QHPS

» Submission of Rates and Forms

› SERFF and/or HIOS › Rate Review Template

› NOTE: FFE QHP applications due April 30th

» Review of Rates and Forms (Completed by July 31st)

› Essential Health Benefits › Actuarial Value Calculator

› New Rating Rules – Risk-Sharing › Non-Discrimination

› Meaningful Difference

» Network Adequacy (based on State/NAIC rules)

› Nebraska will use the HMO Network adequacy review standards

» Marketing (by State)

(32)

State of Nebraska: Exchange Overview

SERFF AND QHP REVIEW AND APPROVAL - SBE

»

Underlying Rate/Form Review

»

QHP Submission Tied to Rates/Forms

»

Verification of Licensure and Accreditation

»

QHP Data Collection

»

Federal and/or State Data/Templates

»

Validation of Federal Templates

»

Separation of Product Review and QHP Certification, if desired

»

Electronic or Manual Transmission to an Exchange

»

FM Data Transfer to CMS

(33)

SERFF AND QHP REVIEW AND APPROVAL - SPE AND PLAN MANAGEMENT MARKETPLACE

»

Underlying Rate/Form Review

»

QHP Submission Tied to Rates/Forms

»

Verification of Licensure and Accreditation

»

QHP Data Collection

»

Federal and/or State Data/Templates

»

Validation of Federal Templates

»

QHP Certification

»

Electronic Transmission to CMS

(34)

State of Nebraska: Exchange Overview

CO-OP PLANS

» Federal government will foster the creation of qualified

nonprofit insurers

› Loans for start-up costs

› Grants to help meet solvency requirements › Unobligated funds cut off in fiscal cliff deal

› CO-OP loans granted to plans in: IL, AZ, CO, CT, IA, NE, KY, LA, ME, MD, MA, MI, MT, NV, NJ, NM, NY, OH, OR, SC, TN, UT, VT, WI

» Must be governed by majority vote of members

» Profits must be used to reduce premiums, increase benefits, or improve quality of care

(35)

STAND-ALONE DENTAL

»

Stand-Alone Dental plans may be sold inside the Exchanges

› Not required to follow market rules; they are excepted benefits › Not eligible for subsidies

»

If Stand-Alone Dental plan includes pediatric coverage, other QHPs do not need to include pediatric coverage

› Option for outside market

› CIIO believes that there will be 6 stand alone dental carries in the federally facilitated exchange

(36)

State of Nebraska: Exchange Overview

MULTI-STATE PLANS

» U.S. Office of Personnel Management (OPM) contracts with insurers to offer at least 2 plans in each state (at least one a non-profit)

» Contracting process similar to the Federal Employees Health Benefit Plan (FEHBP)

» Insurers must be licensed in every state in which they operate

› Must be in at least 60% of states in first year; 70% of states in second year; 85% of states in third year; and all states in fourth year

› Not required to cover entire state unless required by state

» Plans must comply with state rules and regulations, if they exist

(37)

NAVIGATORS

» Exchanges must make grants to “Navigators.”

› Trade, industry, and professional associations › Fishing, ranching, and farming organizations › Community and consumer-focused nonprofits › Chambers of commerce

› Unions

› Licensed agents and brokers (if they do not receive any compensation from carriers)

» Navigators Conduct public education and distribute information » Navigators facilitate enrollment, but may not advise or enroll » Navigators provide referrals to consumer assistance offices

(38)

State of Nebraska: Exchange Overview

NAVIGATORS (CONTINUED)

» HHS to develop standards to ensure that Navigators are qualified and trained » Navigators may not be insurers or receive direct or indirect compensation from

insurers for enrollment in a QHP

» States may not require a Navigator to be licensed as an agent or broker

» States should be careful to ensure that Navigators do not perform functions that would require a producer's license

(39)

OTHER “ASSISTERS”

»

State Assisters (grant funds available)

»

Application Assisters (Counselors)

› Primarily in hospitals and clinics

› Volunteers with training and certification

»

Agents and Brokers

› Listed on the Exchange

› Commissions Paid by Insurers › Appointment Issues

(40)

State of Nebraska: Exchange Overview

NAIC AND PRODUCER LICENSING DATA

»

Support Validation of Producer Licensing in SPE, Quasi-Partner and FFE

»

Data Transmission from NAIC State Producer Licensing Database

»

Daily Transmissions

(41)

SUBSIDIES: PREMIUM TAX CREDIT

» Available from

100% - 400% FPL. » Covers the difference

between premium for

the second-lowest-cost Silver plan and a percentage of

income.

» Advanced to insurer.

Premium Tax Credits

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

100% 133% 150% 200% 250% 300% 400%

Household Income as % of FPL

P re m iu m C a p a s % o f In c o m e

(42)

SUBSIDIES: REDUCED COST-SHARING

» Available from

100% - 400% FPL.

» Increases actuarial value of silver plan.

» First achieved by reducing out-of-pocket limit.

» Advanced to insurer.

Cost-Sharing Subsidies 94% 87% 73% 70% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

100-150% 150-200% 200-250% 250-400%

Household Income as % of FPL

A c tu a ri a l V a lu e o f S il v e r P la n

(43)

SUBSIDIES: SMALL BUSINESS TAX CREDIT

»

Businesses with 25 or fewer employees.

»

Average wages less than $50,000.

»

Contribute at least 50% of premium.

»

Phases out as size and wages of business increase.

»

2010-2013: Up to 35% of total employer contribution.

(44)

State of Nebraska: Exchange Overview

NDOI ACTIVITIES

»

Stakeholder Outreach

»

Update Plan Management Functions and Hire New Staff

»

Market Conduct Updates and Complaints System Coordination

(45)

QUESTIONS?

Martin Swanson (402) 471-4648 Health Policy Counsel

ACA Project Director

John Paul Sabby (402) 471-0344 Policy Analyst

References

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