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Brad Wethington, CLU, ChFC, LUTCFVice President – TPA Services

Healthcare Reform - Between the Marketplace and the Employer Shared Responsibility

Friday, May 16, 2014

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Agenda

Update on FFM and SBM2014 Mid-year EnrollmentIndividual MandateEmployer Shared ResponsibilityQ&A

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2014 Open Enrollment

8 million enrollees 2.2M young adults (28 percent) 2.7M between 0 and 34 (34 percent)

85 percent qualified for subsidyIndiana: 132,423Last-minute surge:

3.8M; 1.2M 47 percent of total and 52 percent of young adults Young adult enrollment doubled

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2014 Open Enrollment

98M website visits33M calls to call centersAll States but One (Washington, DC) with State Exchange

failed to meet Youth goal of 39 percent (considered minimum to keep premiums low)

Wide variation by State, Ethnicity California highest percentage of people (43 percent) eligible for

marketplace enrollment Top 12 states enrolled at least 30 percent of their eligible

populations; bottom 17 states 20 percent or fewer Only 400,000 Latinos of 10.2 million eligible

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Results

Total enrollment on Exchange, through brokers & Medicaid expansion = 17.8M

No data on how many were already insuredPercentage of adults without insurance reduced from

18 percent of the adult population (40M uninsured) to 15 percent (33M uninsured) – a reduction of 7.26M

7.26M new insureds result in Q12014 health spending growth of 9.9 percent – fastest in over thirty years: Increase in elective surgeries Increase in costly medications

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Open Enrollment Still Open

Birth or adoption of a child Marriage, divorce Losing eligibility on parent’s health plan upon turning 26 Moving to a new area Special Enrollment Period (i.e., through July 1) for COBRA eligible Individuals whose individual market plans are renewing outside of

open enrollment have 60 days from the renewal date to select QHP 60-day Special Enrollment period beginning 5/1 for those currently

in a high-risk pool who have not purchased coverage through marketplace

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Enrollment Costs & Plans For 2015

Cost per uninsured enrollee between $5.42 and $25,000State exchanges must be financially sustainable by end of

2015 when federal funding endsFFM States Contemplating SBM:

New Mexico Idaho

SBM States Contemplating FFM: Oregon and Maryland – already announced Minnesota, Nevada, Massachusetts - considering

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Individual Mandate

2014 $95 per adult; $47.50 per child (up to $285 for family) or 1 percent

of income, whichever is greater First $10,000 exempt; $20,000 for family Penalty pro-rated by the number of months without coverage No penalty for single gap of less than 3 months Hardship exemption for purchases made on or off exchange through

5/12015

$325 per adult; $162.50 per child (up to $975 for family) or 2 percent of income, whichever is greater

Same rules apply as 2014 except (maybe) the hardship exemption

Employer Shared Responsibility Rules

AKA Employer MandateFinal Rules Released February 10th

Rules Generally Take Effect 1/1/15

Important Changes from Rules Issued December, 2012

Phase in employer requirements for smaller employers (i.e., <100 FT equivalent employees) until 1/1/16

<50 FTE equivalent still exemptTo be eligible, employer will have to go through a

certification process

Certification Process

During period beginning on 2/9/14, and ending on December 31, 2014, employer certifies they did not reduce the size of their workforce or the overall hours of service of its employees in order to satisfy the workforce size condition

Employees of entities that are part of controlled group still aggregated when determining if mandate enforcement applies

Employee Count

Employer establishes 6 mo period in 2014 to count employees for 2015

If ER uses last few months as measurement period, Er will not have to have compliant plan in place until 4/1/15

Employer Shared Responsibility

Penalties not assessed if offer coverage to at least 70 percent of FTE (increases to 95 percent in 2016)

Employer may still be subject to the “b” penalty of $3,000 per individual employee if an otherwise eligible employee who was not offered coverage does seek and obtain subsidized coverage through exchange

Choice to exclude certain classes of workers in order to fall under 70% coverage may be deliberate for 2014, as this transition relief was intended to make the transition to the 30 hours/week standard of offering coverage easier for employers

Additional Rules

Non-calendar plans not required to comply until first renewal on-or-after 1/1/15 (applies to ERISA plan year defined in SPD)

No penalties to ER’s not offering coverage to dependents in ‘15 as long as they’re taking steps to offer in ‘16

Exempt Employees

Service hours of certain types of individuals not taken into consideration even if receiving some compensation (e.g., expense reimbursements): Bona fide volunteer Students participating in federal work-study program Individuals who work for religious organizations who have taken vow

of povertyRule provides detailed guidance on counting hours:

Adjunct faculty People with on-call duty responsibility (e.g., medical personnel,

people with layover hours like airline employees, commissioned sales people)

For More Information

NAHU: http://newsmanager.commpartners.com/nahuw/issues/2014-02-11/index.html

IRS: http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act

US Treasury Department:http://www.treasury.gov/press-center/press-releases/Documents/Fact%20Sheet%20021014.pdf

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Premium Subsidies

Premium and Cost-Sharing Subsidies Under Health Reform[2]

Income Required Premium Contribution Actuarial

value of coveragePercentage of

poverty line Percentage of income

100 - 133% 2% 94%

133 - 150% 3-4% 94%

150 - 200% 4-6.3% 87%

200 - 250% 6.3-8.1% 73%

250 - 300% 8.1-9.5% 70%

300 - 350% 9.50% 70%

350 - 400% 9.50% 70%

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Cost-Sharing Subsidy

Household Income (as percentage of Federal Poverty Line (FPL)

Reduction in Out-of-Pocket Liability

Single Family

100-200% Two-thirds of the maximum $2,114.55 $ 4,229.10 200-300% One-half of the maximum $3,175.00 $ 6,350.00 300-400% One-third of the maximum $4,233.29 $ 8,466.58 >400% Maximum $6,350.00 $12,700.00

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Maximum Liability

<200% of FPL $600

200% to 300% $1,500

300% to 400% $2,500

>400% Unlimited

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Questions