Ready or Not, Its Time for the Affordable Care Act (ACA) Open Enrollment

Like it or Not / Ready or Not:
Get Set for Health Care Reform
Oct. 1 Open Enrollment
August 20, 2013 – October 1, 2013 = 41 days!
© 2013, Michael Chapman, TheMedicalInsuranceExchange.com. Reprints without prior authorization from author expressly prohibited.

• The time for denial, procrastination,
political pontification is over…
• …ACA Open Enrollment is gonna
happen!

Session Overview
• Major Market Reforms
• Individual/Employer Mandates
• Public/Private Health Insurance Exchanges
• Business Impact & What to Do
• Employee/Individual/Family Impact & What
to Do
• Timing and Action Plan Recommendations

Today’s Audience:
• Individuals / Families
• HR Professionals.
• Business Owners and Leaders

Today’s Presentation:
• Crammed with new, updated information
and personal strategies.
• Q&A at end of presentation, please.
• No jokes or funny pics.
• Serious stuff.
• Listen, think
• Go back to Slideshare.net to review.
• Designed to prompt you to take action.

Key Things to Know About ACA
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications

Individual
Mandate
Everyone must have qualified health
insurance coverage or pay IRS Tax
Penalty
Employer
Mandate
50+ Employers will be required to
offer their employees qualified health
insurance coverage (Delayed until
2015)
Exempt
Employers
Employers with fewer than 50 full
time employees will be exempt from
coverage mandate
Penalties for
Individuals
The greater of a dollar amount or
percent of income. In 2014 – $95 or
1%. In 2016 – $695 or 2.5%.
Penalties for
Employers
2015 - Penalties for 50+ employers
based on whether insurance is
offered at all, or at an affordable cost.
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications

Immediate Reforms – Prior to 2014
No lifetime limits; annual limits restricted
Dependent Coverage extended to age 26
Minimum Medical Loss Ratios (MLR)
Summary of Benefits and Coverage (SBC)
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications

Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Summary of Benefits and Coverage (SBC)
Requirement
Medical insurers must provide summaries of
major medical coverage in a format dictated
by HHS (September 2012)
Purpose
To provide individuals with standard
information so they can compare medical
plans as they make decisions
Timing
Employer must provide SBC to each
employee and document acknowledgement of
receipt by employee.

Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
W-2 Reporting Requirements
Requirement
Employers filing 250+ W-2 Forms must disclose the
value of certain health insurance plans on W-2
Forms (January 2013)

Reforms Beginning January 2014
No pre-existing condition Exclusions, Rate-ups
Guaranteed Issue Policies
Adjusted Community Rating
Essential Health Benefits (EHB)
Maximum Deductible Limits
Coverage
Mandates
Plans
Insurance
Exchanges
Disclosures &
Communications

Qualified (“Metal”) Insurance Plans
Plan Level
Actuarial
Value
Description
Bronze 60% Actuarial value equals the total
value of health care expenses
paid by the plan, ranging from
60% to 90%.
Actuarial values may be achieved
by varying the level of cost-
sharing across deductibles, co-
payments and specific benefit
offerings.
Silver 70%
Gold 80%
Platinum 90%
Catastrophic
Limited to individuals under age 30 or in a defined
financial hardship category

Essential Health Benefits – 10 Statutory Categories
1. Ambulatory Patient Services
2. Emergency Services
3. Hospitalization
4. Maternity and Newborn Care
5. Mental Health and Substance
Use Disorder Services,
including Behavioral Health
Treatment
6. Prescription Drugs
7. Rehabilitative and Habilitative
Services and Devices
8. Laboratory Services
9. Preventive and Wellness
Services and Chronic Disease
Management
10. Pediatric Services, including
Oral and Vision Care

“Metal” plans assist comparison.
Big Changes in Medical Networks:
• PPO networks from Blue Cross, Cigna
• Individual HMO Blue in TX, other states
• Parkland HMO in Dallas County only
More Coverage: Maternity,
Mental/Emotional/Alcohol/Drug Abuse
• More Wellness: Well Woman, Well Man,
Immunizations, etc.
• Child dental, vision included
Coverage
Mandates
Plans
Insurance
Exchanges
Disclosures &
Communications

Key Things to Know
Adjusted Community Rating:
• Rates Based on Claims within zip code of
company headquarters or individual.
• Rates are Unisex
• Age Bands Changing from 6:1 >> 3:1 ratio
• (++ for under age 35)
• 50% increase allowed for smokers.
• Higher Federal Taxes in rates.
Coverage
Mandates
Rates
Insurance
Exchanges
Disclosures &
Communications

Key Things to Know
IRS Subsidies:
• Companies:
• Subsidies up to 50%, 25 or less
employees, $30,000 or less income
• Individuals:
• Over 60% of Americans qualify
($88,500 for family of 4)
• Go to goo.gl/LbldeU & see if you qualify*
• Employee & Dependents not Eligible for
Subsidy if Employer Offers Group Health
Plan to Employees.
Coverage
Mandates
Subsidies
Insurance
Exchanges
Disclosures &
Communications
*(Or go to: TheMedicalInsuranceExchange.com/
obamacare-subsidy-calculator)

Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Public/Private Exchanges for
Small Employers and Individuals
Online Market for Health Insurance
• TX: federally owned and managed Exchange
• 4 defined plan levels with mandated components
• Subsidies for income below 400% of poverty.
Agents, Brokers and Navigators
• Agents and brokers can access public/private
exchanges through certification process
• Navigators are contracted and trained by
exchanges

Comparing Health Insurance Exchanges
Public Exchanges Private Exchanges
Oversight
State Agency, Federal
Government, or State-Federal
Partnership
Carrier or Private Operator
Carrier Participation
Regulated by State/Fed
Exchange
Contracted by Exchange
Owner
Plan Participants
Qualified Individuals, and
Qualified Employers
Individuals, Small and Large
Employers
Voluntary Products No
Contracted by Exchange
Owner
Plan Options and Design
Mandated Actuarial-Value
Plans (“Metallic Plans”)
Mandated Actuarial-Value
Plans (“Metallic Plans”)
Guaranteed Issue with No
Medical Underwriting
Yes Yes
Employer Financial
Subsidy
Unclear; Employer May Offer
HRA Subsidy to Offset
Premium Cost
Not in TX (Yet)
Availability of Federal
Income-Based Subsidies
Yes Yes
Rating Restrictions
Yes: Maximum Age Ratio 3:1;
Smoker Ratio 1.5:1; Age-Based
Rates; State-Specific Rates
Yes: Maximum Age Ratio 3:1;
Smoker Ratio 1.5:1; Age-Based
Rates; State-Specific Rates

Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Federal Market for Individual Health Insurance in TX
• TX: Blue Cross, CIGNA (Humana in Houston only)
Private Exchanges operated by Brokers and Agents
• Perform same functions as Federal Exchange
• Secure subsidy qualification, application, health
insurance selection, and checkout/payment.
• Better expertise, training, advice from Pvt. Exchanges
• Service before, during and after from Pvt. Exchanges
• Best in Class Example:
TheMedicalInsuranceExchange.com
Federal and Pvt. SHOP Exchanges for small
businesses operated by Brokers and Agencies
beginning in 2015

Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Who Ya Gonna Call?
Navigators and Assisters
• Unlicensed, 6 hrs. of training, can only help
answer questions about paperwork. Temporary
positions.
National Call Centers & Insurance Carriers
• Licensed, but can’t help you compare.
• Little experience, many are temporary positions.
• Good luck getting through.
• No service after enrollment.
√ Broker/Agent Private Exchanges.
• Superior Expertise, training, advice.
• Service before, during and after enrollment.
• Best in Class Example:

Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Who Ya Gonna Trust?
Would You Rather Share Your IRS Return,
Social Security, and Protected Health
Information to Apply for Health Insurance
and for Tax Subsidy with:
A. A Temporary Navigator or Assister?
B. A Call Center Temp from a carrier or
from www.e-HealthInsurance.com,
ExtendHealth, etc.?
C. √ A Licensed, Experienced, Trusted
Broker & Employee Benefits Advisor
from TheMedicalInsuranceExchange.com?

Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Open Enrollment Period:
• October 1, 2013-March 31, 2014
Earliest Coverage Effective
Date:
• January 1, 2014

Key Things to Know
Coverage
Mandates
Market
Reforms
Insurance
Exchanges
Disclosures &
Communications
Make an Appointment Now for 10/1
• Less than 1% of Health Insurance Agents &
Brokers have gone through certification, and many
have left the industry or don’t know enough about
ACA.
• ALL Navigators and Assisters have no experience,
minimal training, and no background checks.
• TheMedicalInsuranceExchange.com
Certified, trained, experienced employee benefits
advisors.

For Business Owners/ HR Profs:
Can Exchanges Help My Business?
BENEFITS FACTS:
• 78% of employment is within businesses with
fewer than 100 employees.
• Fewer than 4 out of 10 of employers with less
than 100 employees offered group health
insurance plan in 2012.
• Projections are that fewer than 2 out of 10
employers with less than 100 employees will
offer group health by 2015/6.

Options For Companies That DO Offer a
Group Health Plan:
• Change Renewal Date to 12/1/13:
• Delays changes until 12/1/14
• Many carriers offering to do this at no cost to maintain,
increase market share.
• This delays “Pain” for one year for employers and employees,
but not necessarily the best option.
Public & Pvt. Exchanges
vs. Group Health

Group Health Plan: Self-Insurance Option
• For companies with 50+ (healthy) Employees
• Only pay employee claims (+ stop loss insurance)
• Escape Community Rating and some mandates, taxes.
vs. Group Health

Group Health Plan:
Terminate the Group Health Plan, and encourage
employees to purchase through a Private Exchange and payroll
deduct premiums:
• Allows Employer to Recoup Years of Health Insurance
Inflation Expense Increases and move to more of a known,
fixed cost benefits contribution.
vs. Group Health

Group Health Plan:
Terminate the Group Health Plan, and encourage employees to
purchase through a Private Exchange and payroll deduct premiums.
• Allows Employer to Compensate Employees in other ways that
have less inflation.
• Fund a Retirement Plan for owner, employees
• Fund Voluntary Benefits like accident, life, disability,
dental, vision that Employees can choose.
• Fund a pay increase for loyal employees (and owners)
Vs. Group Health

Group Health Plan:
• Terminate health plan and encouraging employees to
purchase through Exchange:
• Gets The Employer out of Health Benefits
Administration nightmares and Reduces Red Tape /
Compliance.
Vs. Group Health

Options For Companies That DO NOT Offer a
Group Health Plan:
• Hold Employee Group Meeting and One on One sessions to
counsel employees, qualify them for subsidies, and enroll in
health insurance and other benefits.
• Explain how not offering group health plan can actually save
employees money by qualifying for subsidy.
• Explain IRS penalties for no coverage.
• Use me to communicate for effective, compliant meetings.
vs. Group Health

For Business Owners/ HR Profs: Can
Exchanges Help My Business?
Options For Companies That DO NOT Offer a
Group Health Plan:
• Many businesses, especially smaller companies, are willing to
contribute some fixed $$ amount per employee but cannot
afford group health insurance.
• Many other employee benefits are fixed/low inflation and can be
pre-taxed.
• Many employees and dependents are eligible for lower cost tax-
subsidized health insurance that wouldn’t be if employer offered
a group health plan.
vs. Group Health

Can Exchanges Help My Employees?
Options For Employees of Companies That DO
Offer Group Health Plan:
• Enroll in company group health plan
• Enroll Self and Family in Insurance Exchange
• Exchange may cost less than employer plan, Employee
gets IRS subsidy if employer’s plan costs employee
more than 9.5% of monthly adjusted gross income.
• Change jobs, go to work for a company with no benefits so
employee qualifies for insurance subsidy for self, family.
vs. Group Health

Can Exchanges Help My Business
AND My Employees?
In Many Cases, Terminating the Group
Health Plan and Helping Employees
Enroll in the Exchange is The Best and
Most Affordable Option for Both the
Employer And the Employees!
vs. Group Health

How Can I Best Help My Business
AND My Employees?
1. Time is Running Out: Have a ACA Benefits
Game Plan in place by 9/1.
• What’s Best for Business
• What’s Best for Employees
2. Hold Employee Meetings to Communicate &
Confirm SBC & Employee Exchange Options
(Note: Even companies not offering Group
Health Plans Should Do This.)
3. Stay Compliant!

Special Info for HR Professionals and
Business Owners/CFOs

Small Businesses: New Reporting
Requirements in 2015
SHOP Exchange (2015) for Small Businesses:
• New Reporting and Regulations for Small Group
Health Plans.
• Notify Exchange (Feds) when covered
employee is terminated to end coverage.
• Notify Exchange (Feds) when new employee
is eligible for benefits or change in benefits.

Prepare for Your ERISA Audit*
(Employee Retirement Investment Security Act)
• Every Employer (Except Churches &
Governments) offering employee benefits are
subject to ERISA law (Dept. of Labor.)
• Must inform employees and plan participants of
their rights, coverage and entitlements “in plain
English.”
• Insurance carriers don’t provide all necessary
language, only new SBC document (by 10/1).
*Its only a matter of time…

• 75-90% of companies out of compliance.
• One out of three employers getting ERISA
documentation request in 2013 from DOL now.
• The DOL intends to audit 75 percent of
employers in Texas, 100% by 2017!
• Employer must inform employees and plan
participants of their rights, coverage and
entitlements “in plain English.”

• Employers has 7 days to respond with the 24
items requested or face a full-blown financial &
benefit audit.
• Penalties from $100-$110/day per employee with
three-year “look back” provision for ERISA
language, up to $500,000 max.
• For companies subject to Form 5500 filing,
there’s no statute of limitations and the
government can look all the way back.

• Whomever processes the ERISA filing
for the company is personally liable.
• Recommendation: Hire an ERISA Attorney or
purchase an ERISA Wrap Product:
• Captures all of a company’s benefits in one
compliant, timely SPD for all company
benefits.

Can Exchanges Help Individuals and
Families?
What To Do NOW
• Coverage for Now Until 12/31:
• “Unbundling” Strategy:
• COBRA Ins. > “unhealthy” family members.
• Individual Ins.> “healthy” family members
• Strongly consider short term plan to keep options
open over next few months.

Families?
What To Do NOW
• Coverage for Now Until 12/31:
• “Unbundling” Strategy:
• COBRA Ins.: “unhealthy” family members.
• Individual Ins.: “healthy” family members
• Strongly consider short term plan to keep options
open.
• Make Appointment NOW for 10/1-10/31 for 1/2014 Coverage.

Families?
What To Do 10/1-10/31
• Appointment:
• Consultation to discuss impact of new options for
family members:
• Pre-ACA Individual plan by 12/1
• COBRA
• ACA Exchange Plan with/without tax subsidy.
• Non-ACA plan + Tax penalty

Families?
Rates and Plans Expected to be Available to
Brokers and Agents by 9/20/13.
• Make an Appointment As Soon as Possible:
• Consultation to discuss impact of new options for
family members:
• Pre-ACA Individual plan by 12/1
• COBRA
• ACA Exchange Plan with/without tax subsidy.
• Non-ACA plan + Tax penalty

Families?
• Evaluate “locking in” to a pre-ACA plan before year end
• vs. COBRA
• vs. an Exchange Plan & possible subsidy for 2014
• vs. paying tax penalty and non-ACA plan for 2014.

Families?
• Evaluate “locking in” to a pre-ACA plan before year end
vs. COBRA vs. an Exchange Plan & possible subsidy
for 2014 vs. paying tax penalty and non-ACA plan for
2014.
• Needed for Appointment:

• Stiff Consequences to Employers who
don’t have a strategy and action plan:
• Tax Penalties
• Business / Personal Compliance Audits and Penalties
• Potentially Much Higher Expenses
• Disgruntled / Financially-Damaged Employees

• Stiff Consequences to Individuals who
don’t have a strategy and action plan:
• Tax Penalties
• Potentially Much Higher Expenses
• Potentially Harmful, Wrong Policy
• Lost Opportunity to Get Affordable Coverage

• Stiff Consequences to Professionals In
Transition Who Don’t Have a Strategy
and Action Plan:
• Tax Penalties
• Potentially Harmful, Wrong Policy
• Lost Opportunity to Get Affordable Coverage
• Loss of Traction in Job Search During 4th Quarter of 2013

• Every US citizen will have the option to
enroll, many for the first time, in health
insurance beginning October 1, 2013.
• There are not nearly enough certified,
licensed, experienced brokers and agents
who will be available to give advice.

• It costs no more to work with a full-time
professional.
• It could cost you a lot more in time, tax
penalties, and consequences of poor
decisions if you don’t.
• Make an appointment as soon as possible
to prepare.

Appointment Preparation:
(you will need to share this info with anyone who assists you*)
• Names / Dates of Birth / Zip Code
• Current Insurance Information
• 1040, W-2 & current income info for
subsidy calculation to determine best
strategy.
*(It is best to share your confidential info with a, licensed, experienced & trusted person.)

How Can You Help Me:
• Help Me Help You:
• Make Appointment:
• Help Me Help Others:
• Individuals/Families
• Businesses
• Help Me Reach/Teach Others:
• Public Speaking

How Can You Help Me:
• Above All Else,
TAKE ACTION!
Then Pay It Forward!!!

Questions?
Contact Mike Chapman
Visit/Make Appointment:
@
(214)764-6315 office
214-732-3691 cell
mtchapman@endeavorgroup.net

Ready or Not, Its Time for the Affordable Care Act (ACA) Open Enrollment

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Ready or Not, Its Time for the Affordable Care Act (ACA) Open Enrollment