Guidelines for the Colorado Health Benefit Exchange and our Federal Exchange are still up in the air. What do these various funding, administration, and oversight issues mean for employers and how will plan pricing, availability, and benefits be addressed? This presentation is designed for the Colorado business leader who needs to understand the current state of the exchanges. In this session, we’ll go over the very latest developments and how they could impact local businesses, discuss how you can create a proactive multi-year benefits strategy, and introduce resources to help you stay on top of this constantly changing landscape.

1. HEALTH CARE REFORM
PREPAREDNESS 104:
State of the Exchange
Brought to you by:

2. Recap of Previous Sessions
Changes through 2013
2
2010 – 2011 • Small employer tax credit rolled out
• Employers can declare their plans grandfathered
• No lifetime maximum on benefits
• Kids covered up to age 26
• Preventative care provided with no cost sharing
• No over-the-counter drugs under HSA/health FSA
2012 • Must report value of health coverage onW2
• New SBC format for easier plan comparisons
• Expanded preventative care including free contraceptives
2013 • Health FSA now limited to $2,500
• New PCORI fee of $1 per employee per year ($2 next 6 yrs)
• New Medicare taxes on those earning over $200,000

3. Recap of Previous Sessions
Changes in 2014 & Beyond
3
Market
Changes
• All policies must be guaranteed issue with no exclusions for
pre-existing health conditions
• All group policies for 2-50 EE’s will be community rated
• New individual and small group exchanges will be available
• New fees on insurance companies will be added to premiums
Pay or Play
Mandate
• NO MANDATE ON EMPLOYERSWITH LESSTHAN 50 EE’S
• Larger employers must provide coverage or pay penalties
• If no coverage, penalty is $2,000 per EE except first 30
• If coverage not “affordable,” pay $3,000 for each EE w/subsidy
Coverage
Changes
• Waiting periods can’t exceed 90 days
• Cost sharing limits: $2,000/$4,000 deductible for small
employers, out of pocket max is limited to HSA limits for all
• Cadillac tax in 2018 on premiums that exceed $850/mo single

4. Health care today
Employers
161MILLION
11MILLION
Individuals
47MILLION
Uninsured
49MILLION
Medicaid
& CHIP
42MILLION
Medicare

5. State Insurance Exchanges

6. •Exchanges will be online
marketplaces for individuals and
small businesses to compare and
purchase coverage
•Exchanges are not a new concept
•But the scale is bigger
 Shop features of plans containing
the same base benefits
 Compare information regarding
cost and quality
 Determine eligibility for tax
credits (premium relief)
 Call or sit down with someone
for help
 Enroll in a plan
What is the Colorado Health Benefit
Exchange (Connect for Health
Colorado)?

7. Features of the Connect for
Health Colorado Marketplace
• Serving individuals, families and small
employers with 2-50 employees
• A new/different way to shop for health
insurance
• The sole access to new federal financial
assistance, based on income
• A separate non-profit, committed to
Colorado mission

8. • Not a replacement for the current market or
brokers
• Not engaged with negotiating rates between
carriers and providers
• Not part of Medicaid
• Not a new government health care system
• Not a State agency or regulatory body
• Does not pull funding from Colorado
General Fund
The Connect for Health Colorado
Marketplace Is Not

9. Why will people use the
individual exchanges?
Exchange participation
Any U.S. citizen or legal immigrant is allowed to purchase coverage on the individual exchanges
Exchange subsidies
A sliding scale of subsidies to pay for coverage
purchased through the exchanges
Individuals and families with incomes between 100% and
400% of the Federal Poverty Level can receive subsidies
Individual mandate
Requires everyone to have health coverage or pay a tax penalty
Guaranteed issue and rating limits
Anyone who applies for coverage must be accepted
Insurers can only adjust premiums based on age,
family size, tobacco use and location

10. • The Marketplace is for Coloradans who currently
buy insurance on their own, who are uninsured,
or don’t have access to coverage through their
employer
• Online shopping, with assistance, if desired, by
phone and in-person
• Health plans will provide a range of coverage
levels
• Customers can access new federal financial
assistance to lower premiums, co-pays and
deductibles
• Several ways to shop: browse health plans,
estimate savings, or apply online for federal
financial assistance
Individuals and Families

11. Individual exchanges
Consumer
visits state
exchange
website
Consumer
provides
income,
citizenship,
and location
to exchange
Exchange
shows plans
available in
the
consumer’s
location
Consumer
chooses the
plan they
want
Consumer
enrolls in
plan with
insurance
company

12. • The Marketplace will provide small group plan options
to Colorado employers with 2-50 employees
• Employers with up to 100 employees can be served in
2016
• Employers can provide greater choice to their
employees with multiple carriers/ plans
• Employees can use benefit allowance to shop for
health plans
• Small business tax credits will be available (up to 50%
of premium) for employers with 2-25 employees,
earning on average $50,000 or less
• Other value-added services will be provided, like
payment aggregation, management tools and ability
to use brokers
Small Employers

13. Financial help to reduce the cost of
premiums
– Individual earning between $15,282 to
$45,960/year
– Couple earning between $20,628 to $62,040/year
– Family of 4 earning $31,322 to $94,200/year
• Tax credit applied up-front by IRS
• Tax credit is higher for Coloradans ages 55-64
Financial help to reduce out of pocket
costs (co-pays and deductibles)
• Individuals earning $15,282 to $28,725/year
• Family of 4 earning $31,322 to $58,875/year
Cost Reductions for Individuals
and Families

14. Maximum Premiums by Family
Size

15. Federal law will require health plans sold to individuals and
small businesses inside and outside of the Marketplace to
provide, at a minimum, the following categories of services
(essential health benefits):
• Ambulatory patient services
• Emergency Services
• Hospitalization
• Maternity/newborn care
• Mental health/substance abuse
• Prescription drugs
• Rehab/habilitative services and devices
• Laboratory services
• Preventive and wellness care/chronic disease management
• Pediatric services, including oral and vision care
Comprehensive Coverage

16. • The intent is to make comparing and
purchasing health coverage convenient and
competitive
• Increase choice
• Helps consumers make an informed decision
by creating transparency about options
• Only place to check eligibility and register for
tax credits and other benefits
• In addition to insurance brokers, the
Marketplace will offer a statewide network of
trained professionals to assist consumers
Benefits for Consumers

17. Actuarial Value
ACTUARIAL VALUE: The percentage of total average costs for covered
benefits that a plan will cover. (source: www.healthcare.gov)
Source: www.healthcare.gov and www.kff.org

18. Qualified Health Plans (QHP)-
Metal Tiers
•To offer coverage through the
exchanges, carriers must have
their plans certified by the
state as Qualified Health Plans
(QHPs). QHPs must:
– Cover Essential
Health Benefits
– Meet coverage,
quality and
transparency
standards
– Fit into at least the
Silver and Gold tiers
of exchange
coverage
– Cannot be more
than +/- 2% of AV
•Available to those up to
age 30 or to those who are
exempt from the mandate
to purchase coverage
Catastrophic
•Pays for 60% of the costs of
the planBronze
•Pays for 70% of the costs of
the planSilver
•Pays for 80% of the costs of
the planGold
•Pays for 90% of the costs of
the planPlatinum

19. • Varies from state to state- carriers in
Colorado must file rates and plan
designs by the end of April
• We should know by May 2nd which
carriers will be participating in both
Marketplaces
• By the June session we should have
a better idea of how the plans stack
up inside and outside the exchange
Deadlines

20. • The Individual Marketplace opens for business on
October 1, 2013 for January 1, 2014 effective dates
– The first open enrollment period goes through March
with the latest effective date of 4/1/14. Future open
enrollment period will be 10/15-12/7 with an effective
date of 1/1
• All plans are guarantee issue
• Individuals must enroll during the “open enrollment”
period or will be subject to penalties
• Cannot obtain coverage outside of open enrollment
without a “qualifying event”
• Qualified individuals can only obtain subsidies through
the Individual Marketplace
Individual Enrollment

21. Penalties for individuals
2014
• $95 per adult and $47.50 per child (up to $285 for a
family) or 1% of taxable income, whichever is greater
2015
• $325 per adult and $162.50 per child (up to $975 for a
family) or 2% of taxable income, whichever is greater
2016
• $695 or per adult and $347.50 per child (up to $2,085 for
a family) or 2.5% of taxable income, whichever is greater
2017
• And beyond – annual adjustments

23. • Small groups can enroll in the SHOP any month (no
specific open enrollment period)
• Employers that decide to drop their group plans do
not need to do so until their renewal
– We believe this creates a qualifying event for those
employees to obtain coverage outside of open
enrollment
• Small groups are not subject to penalties for not
offering health coverage and do not have to comply
with the rules of offering coverage
– Can currently discriminate (contributions, management
carve outs by class, salary, etc), but this is expected to
change for all non-grandfathered plans, but likely won’t
implement until group renewal following ruling
SHOP (Small Business Health
Options Program) Marketplace

25. • Pre-tax small group plans will be
available in and out of the Marketplace
• If employer decides to drop coverage
and gross up salaries to encourage
employees to obtain coverage through
the Marketplace, employer must pay
payroll tax on gross up and employee
pays income tax and loses tax
advantage on premium contribution
Tax Treatment of Group vs
Individual Coverage

26. A Summary of Your Choices
Advantages: Advantages: Advantages:
EE's may get subsidies Choose multiple carriers No new process
Simplifies compliance Aggregate Billing May be more plan choice
No cost to employer Small Biz Tax Credit Broker can assist group & EE's
Broker can help EE's enroll Broker can assist group & EE's
Individual
Exchange
SHOP
Exchange
Small Group
Market

27. Brought to you by:
Thank You!
Questions?
Eden Ripingill
(303) 306-2561
Eden.M.Ripingill@kp.org
Kristen Russell
(303) 369-3200
kristen@fallriverbenefits.com