June, 2013 Small Business Update. 2 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved....

June, 2013

Small BusinessUpdate

2 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved.

Small business


Promotions

Your clients will lock in rates for May 1 to September 1 effective dates, and you’ll get a bonus.

Guaranteed RAF based on the number of new subscribers enrolled with Kaiser Permanente New groups with 1-5 subscribers 1.10 RAF New groups with 6+ subscribers .90 RAF

Bonus for every new small group plan you sell that has 6 or more Kaiser Permanente subscribers New groups with 6-9 subscribers $500 New groups with 10-15 subscribers $750 New groups with 16+ subscribers $1,000


Rate adjustment factor (RAF) and bonus program


Rate changes

All HMO copay, deductible HMO, HSA, and HRA plans

Region Year-over-year 6-month

Northern California 6.1% 3.9%

Southern California 6.1% 6.1%

Includes CalChoice, HSA California, and Choice Solution plans

5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved.6

July 2013 rate changes

POS and PPO plans

Region Year-over-year 6-month

Northern California POS 5.0% 0.0%

PPO 1.9% 0.0%

Southern California POS 3.0% 0.0%

PPO 1.9% 0.0%

Includes Choice Solution plans


July 2013 rate changes


New policies and reminders

Effective immediately, any new group employer application must be received by the 1st of the month in which it is effective.

July 2013 rates will be available on June 15 to quote online. In the meantime, please send your quote requests to [email protected].

New enrollment material is posted on BrokerNet (brokernet.kp.org) as of May 1, 2013. Please refer to BrokerNet for the most up-to-date materials.


2013 new group updates

A small group that has a management carve-out wants to meet employer shared responsibility. What are their options?

Groups with 51 to 100 total employees can add non-covered employees to current small group policy by purchasing insurance directly through Kaiser Permanente, but they are not eligible for SHOP.

Groups with 101 or more employees will transfer to large group.


What to do when your small group may be “large”?

Small Business Unit will handle small to large group transfer.

Groups with 51-100 total employees will remain in small group.

Groups with 101 or more total employees will transfer from small to large group.


Transferring groups from small to large


Rating changes under the ACA

Multiple plan offering

Tax credit

Guaranteed availability

3:1 rating ratio

Valid waivers

Member level rating

Grandfathered or

non-GF

Carrier-direct or

SHOP


Small business considerations

Today

7 age bands, no ratio rules Family tier rating 7 rate areas Based on employer ZIP code Risk adjustment factors (.90-1.10)

2014 and beyond

45 age bands, 3:1 max ratio Member level rating 19 rating areas Based on employee ZIP code No risk adjustment factors

Groups with grandfathered plans will continue to be rated in 2014 as we do today. Groups with nongrandfathered plans will be rated based on the 2014 and beyond

methodology. Groups with grandfathered and nongrandfathered plans will be rated using both

methodologies.


How rating will change in 2014

Many factors will impact an employer's rates in 2014. Groups with grandfathered plans will be impacted less than groups with nongrandfathered plans.

Here are some factors that will impact a small employer:Rate impacts Grandfathered plans Nongrandfathered plans

Trend Yes Yes

Fees Yes Yes

SHOP participation fee No Yes

Benefit & plan changes No Yes

Elimination of risk adjustment factor (RAF)

No Yes

Market-based risk adjustment No Yes

Member level rating No Yes


Why grandfathered status matters

Current rates $30 plan

Age EE EE + SP EE + CH FAM

<30 $303 $847 $833 $1,179

30-39 $335 $910 $856 $1,303

40-49 $432 $994 $821 $1,312

50-54 $563 $1,170 $928 $1,495

55-59 $711 $1,493 $1,063 $1,717

60-64 $877 $1,666 $1,173 $1,945

65+ $995 $2,150 $1,496 $2,363

Age Rate Age Rate0-20 $196 43 $418 21 $308 44 $430 22 $308 45 $445 23 $308 46 $462 24 $308 47 $481 25 $309 48 $503 26 $315 49 $525 27 $323 50 $550 28 $335 51 $574 29 $345 52 $601 30 $350 53 $628 31 $357 54 $657 32 $364 55 $687 33 $369 56 $718 34 $374 57 $750 35 $376 58 $785 36 $379 59 $802 37 $381 60 $836 38 $384 61 $865 39 $389 62 $885 40 $394 63 $909 41 $401 64+ $924 42 $408

Illustrative ACA-compliant rates

Compare and contrast the rate structure for a $30 copay plan at a 1.0

Current rate structureBased on the subscriber age and family tier

ACA-compliant rate structureBased on each family member age


Member level rating

Example 1 of member level rating impact

Age EE EE + SP EE + CH FAM<30 $303 $847 $833 $1,179

30-39 $335 $910 $856 $1,303 40-49 $432 $994 $821 $1,312 50-54 $563 $1,170 $928 $1,495 55-59 $711 $1,493 $1,063 $1,717 60-64 $877 $1,666 $1,173 $1,945 65+ $995 $2,150 $1,496 $2,363

Current rates

ACA Compliant Member RatesAge Rate Age Rate Age Rate Age Rate0-20 $196 32 $364 44 $430 56 $718

21 $308 33 $369 45 $445 57 $750 22 $308 34 $374 46 $462 58 $785 23 $308 35 $376 47 $481 59 $802 24 $308 36 $379 48 $503 60 $836 25 $309 37 $381 49 $525 61 $865 26 $315 38 $384 50 $550 62 $885 27 $323 39 $389 51 $574 63 $909 28 $335 40 $394 52 $601 64+ $924 29 $345 41 $401 53 $628 30 $350 42 $408 54 $657 31 $357 43 $418 55 $687


Employee: Joe, age 53, with a spouse and 4 children

Member level rating family premium: $1,719

Family memberJoe, age 53Spouse, age 48Child, age 18Child, age 16Child, age 14Child, age 12

Family coverage tier premium: $1,495

$1,719

Rate$628$503$196$196$196$0

Example 2 of member level rating impact

Age EE EE + SP EE + CH FAM<30 $303 $847 $833 $1,179

30-39 $335 $910 $856 $1,303 40-49 $432 $994 $821 $1,312 50-54 $563 $1,170 $928 $1,495 55-59 $711 $1,493 $1,063 $1,717 60-64 $877 $1,666 $1,173 $1,945 65+ $995 $2,150 $1,496 $2,363

Current rates

ACA Compliant Member RatesAge Rate Age Rate Age Rate Age Rate0-20 $196 32 $364 44 $430 56 $718

21 $308 33 $369 45 $445 57 $750 22 $308 34 $374 46 $462 58 $785 23 $308 35 $376 47 $481 59 $802 24 $308 36 $379 48 $503 60 $836 25 $309 37 $381 49 $525 61 $865 26 $315 38 $384 50 $550 62 $885 27 $323 39 $389 51 $574 63 $909 28 $335 40 $394 52 $601 64+ $924 29 $345 41 $401 53 $628 30 $350 42 $408 54 $657 31 $357 43 $418 55 $687


Employee: Joe, age 53, with a spouse and 1 child

Member level rating family premium: $1,327

Family memberJoe, age 53Spouse, age 48Child, age 18

Family coverage tier premium: $1,495

$1,327

Rate$628$503$196

Kaiser Permanente will support grandfathered plans. Other insurance carriers may support or eliminate grandfathered

plans.


Can your clients maintain grandfathered status?

At a group’s 2014 renewal, we will map them to an aligned plan.

We will align as closely as possible based on actuarial value, and then also on product plan design.

Preserve product type (copay, deductible HMO, HSA, HRA).

Goals for mapping:


Nongrandfathered mapping to ACA metal plans

Birthday billing eliminated for grandfathered and nongrandfathered plans.

Rates will be adjusted based on age at contract renewal.

New hires will be rated based on the age that they were at the beginning of the contract year.


Rating rules

Covered California standard plan options by metal as released on March 27, 2013

Platinum Gold Silver Bronze Catastrophic

Copay

Copay $20 Ded Not applicableIP/OP $250 per day (up to 5 days) Rx $5/$15 – No brand deductibleOOP Max $4,000


Copay $45 Ded $2,000 (IP only)IP/OP 20% Rx $25/$50 – $250 brand deductibleOOP Max $6,350

Copay $60 Ded $5,000 (integrated Med/Rx deductible)IP/OP 30% Rx $25/$50 (integrated Med/Rx deductible)OOP Max $6,350

Copay $0 Ded $6,350 (integrated Med/Rx deductible)IP/OP $0 Rx $0 (integrated Med/Rx deductible)OOP Max $6,350

Coinsurance

Copay $20 Ded Not applicableIP/OP 10%Rx $5/$15 – No brand deductibleOOP Max $4,000

Copay $30 Ded Not applicableIP/OP 20% Rx $20/$50 – No brand deductibleOOP Max $6,350


HSA

Copay 40%Ded $4,500 (integrated Med/Rx deductible)IP/OP 40% Rx 40% (integrated Med/Rx deductible)OOP Max $6,350


2014 standard individual exchange plans

Covered California standard plan options by metal as released on March 27, 2013

Platinum Gold Silver Bronze

Copay




Copay $60 Ded $5,000 (integrated Med/Rx deductible)IP/OP 30% Rx $25/$50 (integrated Med/Rx deductible)OOP Max $6,350Coinsurance

Copay $20 Ded Not applicableIP/OP 10%Rx $5/$15 – No brand deductibleOOP Max $4,000

Copay $30 Ded Not applicableIP/OP 20% Rx $20/$50 – No brand deductibleOOP Max $6,350


HSA

Copay 20%Ded $1,500 (integrated Med/Rx deductible)IP/OP 20% Rx 20% (integrated Med/Rx ded)OOP Max $6,350

Copay 40%Ded $4,500 (integrated Med/Rx deductible)IP/OP 40% Rx 40% (integrated Med/Rx deductible)OOP Max $6,350


2014 standard small group exchange plans

Employee choice of carrier with no minimum participation

Consolidated billing and enrollment

Defined benefits platform

Plan comparison tools

Tax credit

Choice of all SHOP plans + extra non-SHOP plans

Group can choose multiple metal tiers

Retain grandfathered plans

No re-enrollment needed

Ongoing relationship

SHOPCarrier access

Carrier directBroad plans


Benefits of the SHOP vs. a direct carrier

ACA limits waiting periods for new hires to a maximum of 90 days. Some states (like California) have reduced this to a 60-day maximum waiting

period. Employers can also have waiting periods of 0 or 30 days. Waiting period maximums apply to small business regardless of whether they

have grandfathered or nongrandfathered plans. Kaiser Permanente will offer the following waiting period options:

— 1st of the month following date of hire— 1st of the month following 30 days from date of hire— 60 days following date of hire (premiums will be prorated)

Existing small groups with waiting periods in excess of 60 days will be mapped to an ACA-compliant waiting period at their renewal in 2014.


How waiting periods will be impacted for small business

Kaiser Permanente will support customer early renewals in Q4 2013.

Some disadvantages with early renewal

• Some groups will benefit from rating changes under the ACA.

• It will delay access to the SHOP, new benefit plans, and enhanced small employer tax credit.


Early renewal available for small groups

Definition of small employer under the ACA does not include sole proprietorships or S corporations unless they enroll at least one non-spouse, common-law employee, i.e., non-owner employee who receives a W-2 and is listed on a DE9C.

CA AB 1083: “For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of ‘S’ corporations, or other individuals, shall be consistent with Section 1304 of ACA.”

ACA Section 1304 defines employer by reference to PHS Act 2891, which incorporates by reference ERISA Section 3(5). Federal law does not classify an individual and his or her spouse as employees when the trade or business is wholly owned by the individual or by the individual and his or her spouse.


Sole proprietors and S corps: What’s required?


Individuals and families

Kaiser Permanente will map individuals with nongrandfathered plans to new ACA-compliant plans as of January 2014.

Consumers who buy or renew policies in 2013 that are not grandfathered will need to renew as of January 2014 with an ACA-compliant plan.


Individuals in 2014


Preparing for 2014

Kaiser Permanente timeline May 2013 July/August

2013September

2013October 2013 January 2014

Business line updates

• January 2014 Plan Highlights, rates and materials available

• Exchanges open

• Enrollment begins

• SHOP and HIX go live

• Minimum value, employer shared responsibility, ACA taxes in rates in effect

Broker resources

• HCR information and tools on BrokerNet

• HCR broker webinar

• Broker BOB tool

• Broker Market Update

Employer communication

• HCR employer guide

• Letter with early renewal and guidance on how plans will change & what needs to be done.

• January 2014 renewals released


What we’re doing to prepare for member growth

Opening new facilities and maintaining or expanding existing ones

Assessing and updating workforce

Providing alternatives to traditional office visits


Health care reform readiness

June, 2013 Small Business Update. 2 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved....

Documents

Transcript of June, 2013 Small Business Update. 2 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved....