Marketplace Matters: Producer Prep Program · Health Insurance Mandate: Overview Overview Minimum Coverage Requirement Beginning in 2014, most U.S. citizens and legal residents must

This presentation is a high-level summary and for general informational purposes only. The information in this presentation is not comprehensive and does not constitute legal, tax, compliance or other advice or guidance.

A Division of Health Care Service Corporation, a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association

MARKETPLACE MATTERSProducer Prep Program

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PROPRIETARY INFORMATION. PROPERTY OF HEALTH CARE SERVICE CORPORATION. DO NOT USE WITHOUT PERMISSION.

In order for a producer to sell Health Insurance Marketplace plans (and receive compensation), a producer must register as an agent/broker with the Centers for Medicare and Medicaid Services (CMS). 1. Producers who are CMS-certified in the Individual Marketplace can sell and

receive compensation for both Marketplace retail plans and non-Marketplace retail plans.These producers do not have to complete this training deck (Marketplace Matters: Producer Prep Program). You are only required to complete the Marketplace Matters: Product and Pricing training.

2. Producers who are NOT CMS-certified in the Individual Marketplace can only sell and receive compensation for non-Marketplace retail plans.If you fall into this category, you need to complete this training deck (Marketplace Matters: Producer Prep Program) as well as the Marketplace Matters: Product and Pricing training and affirm you have done so.

Training Requirement to Sell Individual

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PROPRIETARY INFORMATION. PROPERTY OF HEALTH CARE SERVICE CORPORATION. DO NOT USE WITHOUT PERMISSION. 3

Plan Type and Market Applicability

An Affordable Care Act provision may affect a specific plan type or market, such as grandfathered plans, non-grandfathered plans, the individual market, the small group market and more. Throughout this training, you will see the following yellow and orange box containing the plans and markets affected by a provision. The acronyms are defined below. Because this training is focused on the individual market, those market/plan types are more prominent:

INDNGF = Individual non-grandfathered plansINDGF = Individual grandfathered plans

We will also note when the provision affects other markets:SMLNGF = Small group non-grandfathered plansSMLGF = Small group grandfathered plansLGFNGF = Large group fully insured non-grandfathered plansLGFGF = Large group fully insured grandfathered plansLGSNGF = Large group self insured non-grandfathered plansLGSGF = Large group self insured grandfathered plans

:

INDNGF, INDGF as well as:

SMLNGF, SMLGF LGFNGF, LGFGF LGSNGF, LGSGF


Training Topics

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� The Affordable Care Act (ACA) Objectives

� Guaranteed Coverage & Renewability

� Rescissions

� Grandfathered Plans

� Health Insurance Mandates

� Rating Rules

� Pre-Existing Conditions

� Lifetime & Annual Limits

� Appeals & External Review

� Clinical Trials

� Summary of Benefits and Coverage

� The Marketplace

� Enrollment Periods

� Essential Health Benefits

� Preventive Services

� Qualified Health Plans

� Metallic Plans & Actuarial Value

� The Federal Poverty Level and ACA

� Premium Tax Credits for Individuals

� Cost-sharing Subsidies for Individuals

� PCORI

� Risk Mitigation (3Rs)

� Health Insurer Fee

� Medical Loss Ratio

� American Indians & Alaskan Natives

� Legal Immigrants

� Medicare, Medicaid & CHIP

� The Marketplace: Privacy & Security Standards

� Training Affirmation Form

PROPRIETARY INFORMATION. PROPERTY OF HEALTH CARE SERVICE CORPORATION. DO NOT USE WITHOUT PERMISSION. PROPRIETARY INFORMATION. PROPERTY OF HEALTH CARE SERVICE CORPORATION. DO NOT USE WITHOUT PERMISSION.

The Affordable Care Act (ACA)Objectives


The Affordable Care Act has several broad objectives. It’s designed to:

• expand health insurance coverage

• improve quality of health care services and

• increase protection to health care consumers.

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ACA Objectives


GuaranteedCoverage & Renewability


Guaranteed Coverage & Renewals

On Jan. 1, 2014, the Affordable Care Act requires coverage to be offered on a guaranteed issue basis and on a guaranteed renewal basis.

Guaranteed Coverage (also called guaranteed issue) The requirement that a plan accept every applicant for health coverage, as long as that applicant agrees to the terms and conditions of the insurance offer (such as the premium)

Guaranteed RenewalsThe requirement on a plan to renew individual coverage at the option of the policyholder, or renew group coverage at the option of the plan sponsor (e.g., employer)

INDNGFas well as:SMLNGFLGFNGF



INDNGFas well as:SMLNGFLGFNGF


Rescissions


Rescissions

The Affordable Care Act (ACA) generally prohibits rescissions, or to the retroactive cancellation of medical coverage.

Rescissions will still be permitted in cases where the covered individual committed fraud or made an intentional misrepresentation of material fact as prohibited by the terms of the plan. A cancellation of coverage in this case requires 30 days prior notice to the enrollee.

The rule provides that any state or federal law that applies to a rescission or cancellation of coverage that is more protective of individuals, beyond the standards established by ACA, would apply in place of the ACA provision.




Grandfathered Plans


• Group and individual health care plans that were in effect at the time the Affordable Care Act (ACA) was passed on March 23, 2010, and have provided continuous coverage since then, may be considered grandfathered plans

• Grandfathered plans are exempt from some ACA provisions

• Grandfathered plans preserve consumers’ rights to keep the coverage they already had before health reform

• Certain changes to a grandfathered plan may mean it loses grandfathered status

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Grandfathered Plans

INDGF as well as:

SMLGF LGFGF LGSGF


Health Insurance Mandate


Health Insurance Mandate: Overview

OverviewMinimum Coverage RequirementBeginning in 2014, most U.S. citizens and legal residents must have and maintain a minimum level of health care coverage (called minimum essential coverage or MEC) or pay a federal tax penalty.

PurposeThe mandates are designed to expand the number of people who buy insurance and create a larger pool to help fund benefits and keep costs lower for everyone.

Individual Mandate or Individual Shared ResponsibilityThis requires most individuals who don’t have health insurance to purchase and maintain coverage.

Employer Mandate or Employer Shared ResponsibilityThis mandate requires most businesses with 50+ full-time equivalent employees to offer minimum essential coverage to their employees and their children. Penalty and reporting are delayed until 2015.

INDNGF, INDGF

LGFNGF, LGFGF LGSNGF, LGSGF


Health Insurance Mandate: MEC

Minimum Essential Coverage (MEC)A person satisfies the individual mandate if enrolled in one of the following MEC types:� An eligible employer-sponsored plan (meets affordability and

minimum value requirements)

� An employer-sponsored retiree health plan

� A health plan offered in the individual market

� A government-sponsored program, including coverage under Medicare Part A, Medicaid, the Children's Health Insurance Program (CHIP) and TRICARE

� Other health benefit coverage that is recognized by HHS, such as a student health plan or a Medicare Advantage plan

ge under


Individual Mandate

Individual ExemptionsIndividual shared responsibility calls for each individual to have minimum essential coverage, qualify for an exemption, or make a payment when filing his or her federal income tax return. Exemptions fall into 8categories:1. Those experiencing financial hardship2. Those with religious objections3. American Indians4. Undocumented immigrants5. Incarcerated individuals6. Those without coverage for less than three months7. Those for whom the lowest-cost plan option exceeds 8% of their income8. Those with incomes below the tax filing threshold (the threshold for those

under 65 in 2013 is $10,000 for singles and $20,000 for married couples filing jointly)


Individual Mandate

Financial Hardship ExemptionThe Marketplace can consider the following circumstances in which a financial hardship exemption may be granted. • becomes homeless, has been evicted in the past six months, or is facing

eviction or foreclosure• has received a shut-off notice from a utility company• recently experienced domestic violence or a fire, flood, or other natural or

human-caused disaster that resulted in substantial damage to the individual’s property

• filed for bankruptcy in the last 6 months• recently experienced the death of a close family member• incurred unreimbursed medical expenses in the last 24 months that resulted in

substantial debt• experienced unexpected increases in essential expenses due to caring for an

ill, disabled, or aging family member


Individual Mandate

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Penalty AmountsTax penalties are assessed according to percentage of income or flat fee, whichever is greater, and will be applied on federal income tax returns.

YearWHICHEVER IS GREATER Maximum Penalty

per HouseholdPercent of Income Flat Fee

2014 1.0% of taxable income $95.00 per adult$47.50 per child $285 per household

2015 2.0% of taxable income $325.00 per adult$162.50 per child $975 per household

2016 2.5% of taxable income $695.00 per adult$347.50 per child $2,085 per household

After 2016 the tax will increase annually by cost of living adjustment (COLA)


Individual Mandate

Penalty ExamplesBelow are examples of the individual Mandate Penalty for a single adult, based on annual income. The penalty is either % of income or flat fee, whichever is greater.

The circled amount is the penalty in the following situations:

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Year Annual income of $15,000

Annual income of $20,000



2014 1%=$150 or $95 1%=$200 or $95 1%=$250 or $95 * 1%=$300 or $95

2015 2%=$300 or $325 2%=$400 or $325 2%=$500 or $325 2%=$600 or $325

2016 2.5%=$375 or $695 2.5%=$500 or $695 2.5%=$625 or $695 2.5%=$750 or $695

1%=$150

$695

$325

$695 $695

2%=$400

1%=$250 1%=$200

2%=$500 2%=$600

2.5%=$750

* Though 1%=$300 is more than the flat fee, the maximum penalty per household is $285.


Employer Mandate

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Employer Shared ResponsibilityUnder the Affordable Care Act, applicable large employers (generally those with 50 or more full-time equivalent employees) may face a potential penalty if they don’t do the following:• Offer minimum essential health coverage to all or substantially all of its

full-time employees and their dependents (children, not spouses) • Ensure that the minimum essential coverage offered meets

minimum value and employee affordability requirementsMinimum Value (MV)A benefit plan meets the MV requirement if the employer is paying at least 60% of covered health care expenses for a typical population

AffordabilityThe employer’s coverage is deemed affordable if the employee’s share of the premium costs for the lowest-cost, self-only plan offered (that meets the MV requirement) does not exceed 9.5% of a full-time employee’s household income


Rating Rules


� Apply to non-grandfathered individual andnon-grandfathered small groups (on/off Marketplace)

� Rating based on health status is prohibited

� Rates may only vary by � geographic area, based on physical

location � individual or family coverage tier� tobacco use* (1.5:1)� age (3:1)

* In the small group market, tobacco users can avoid the smoking surcharge if they participate in a wellness program. Wellness programs in the individual market are not yet possible due to other federal requirements.

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Rating Rules

INDNGF as well as:SMLNGF


Pre-existing Conditions


• Since the law passed in March 2010, children under 19 with pre-existing conditions may not be denied coverage

• On Jan. 1, 2014, health plans cannot impose a pre-existing condition exclusion (deny or limit coverage) onenrollees of ANY age

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Pre-existing Conditions




Lifetime & Annual Dollar Limits


Lifetime & Annual Dollar Limits: Overview• Starting in 2014, plans sold on and off the Health Insurance Marketplace

must include certain health benefits that are deemed essential.• The minimum package of items and services that must be covered by

these plans is generally defined by each state’s Essential Health Benefits (EHBs) benchmark plan.

• Individual non-grandfathered and small group non-grandfathered health plans can’t impose lifetime dollar limits or annual dollar limits for in-network EHBs.

• Large group plans, self-insured plans and grandfathered plans are not required by ACA to offer EHBs. However, if these plans do offer EHBs, they must be covered without annual dollar limits or lifetime dollar limits.

• Lifetime and annual dollar limits on EHBs that are covered by all health plans must be removed or converted to visit, frequency or item limits.

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Annual Dollar Limit on Out-of-pocket (OOP) Expenses for EHBs• Limit out-of-pocket member liability for in-network

essential health benefits (EHBs) to no more than $6,350 for individual coverage and $12,700 for family coverage for the 2014 plan year

• Generally, member liability that is considered part of the out-of-pocket maximum includes:• Deductibles, coinsurance and copayments for in-network EHBs• Any other expenditure required by, or on behalf of, an enrollee for

in-network EHBs including out-of-network emergency services

• Applies to non-grandfathered health plans that cover EHBs including• all individual non-grandfathered plans & small group non-

grandfathered plans• all large group plans that cover EHBs

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INDNGFas well as:SMLNGF

LGFNGF, LGFGF LGSNGF, LGSGF


Annual Dollar Limit on Deductibles for EHBs• Deductibles for in-network essential health benefits

(EHBs) must not exceed $2,000 for individual coverage and $4,000 for family coverage for the 2014 plan year.

• A health plan may exceed the deductible limit if it cannot reasonably reach a given level of metallic level (actuarial value) coverage without doing so.

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Lifetime Limits Prohibits group health plans and insurers that offer health insurance coverage from imposing lifetime limits on the dollar value of EHBs



SMLNGF


Appeals & External Review



Members have the right to appeal health plan decisions. Health plans have to tell members why a claim has been denied and provide information on how that decision can be disputed:

• Internal Appeals: Health plan can be asked to reconsider its decision. It must review its decision.

• External Review: If the health plan still denies payment, the law allows members to have anexternal review.

Rights vary per state due to state law

INDNGFas well as:SMLNGF LGFNGFLGSNGF



External Review is available when the plan denies treatment based on:

• medical necessity• appropriateness• health care setting• level of care• effectiveness of a covered benefit• when the plan determines that the care is experimental• rescissions of coverage

An external review either upholds the plan's decision or overturns all or some of the plan’s decision. The plan must accept this decision.



Clinical Trials


Health Plan RequirementsRequires that if a qualified individual is in an approved clinical trial, the plan may not do any of the following:

1. Deny the individual participation in the clinical trial

2. Deny the coverage of routine patient costs for items and services furnished in connection with the trial

3. Discriminate against the individual on the basis of the individual’s participation in such trial

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Clinical Trials



Summary of Benefits and Coverage


All health insurers are required to provide consumers with a uniform and standardized summary of benefits and coverage (SBC) for their policies.

• The SBC is intended to provide clear descriptions that may make it easier for people to understand their health insurance coverage

• The SBC is completed using a government-designed template so the SBC will be consistent for all policies

• The items in the SBC represent an overview of coverage; they are not an exhaustive list of what is covered or excluded and full terms are located in the policy

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The summary of benefits and coverage (SBC) will include:

• What is covered by the plan

• What is not covered by the plan

• Coverage examples

• A website and phone number for customer service and obtaining more information

All insurers must provide an SBC to consumers:• Upon application• At enrollment• Annually upon re-enrollment• Upon request

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The Marketplace


The Marketplace

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Defined� Marketplaces are designed to help people meet the

minimum coverage mandate, which requires those who don’t receive coverage from employers or the government to buy it from insurance companies, or pay a tax penalty

� Marketplaces allow consumers and small employers to shop and buy health insurance, called qualified health plans (QHPs), based on price, quality and other factors

� QHPs are health insurance plans that have been certified to be allowed for purchase on the Marketplace

� QHPs and the carriers that sell them must meet many criteria to be offered on the Marketplace

Exchange and Marketplace are different terms used to describe the same thing. Exchange is used in the actual text of the law. Marketplace is a more user-friendly term recently adopted by federal agencies when communicating with consumers.



The Marketplace

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PurposeThe Marketplace was designed to:� Help enhance competition in the health insurance market by

putting insurers on a more equal footing and encouraging competition based more on managing costs and quality of care

� Implement procedures for certifying, decertifying and recertifying qualified health plans

� Collect health plan data and provide transparencyon claim payments, enrollment, financials and more

� Help people meet the Affordable Care Act’s minimum essential coverage requirement (also called the individual mandate)

� Provide “non-marketing” unbiased information to help consumers better understand the options available to them



The Marketplace

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Functions1. Marketplaces will provide competitive online websites for

consumers to shop and compare health insurance plans based on price, benefits, services and quality.

2. Marketplaces will allow people to choose, buy and enroll in a selected plan.3. Marketplaces will determine consumer eligibility for a qualified health plan

as well as public programs such as Medicaid and Children’s Health Insurance Program (CHIP), and enroll people in these coverage types if eligible.

4. Marketplaces will allow consumers to determine if they are eligible for assistance and estimate the cost of coverage after premium tax credits and other subsidies are applied.

5. Marketplaces will create more of a level playing field of health plans. 6. Marketplaces will assist consumers with a toll-free hotline as well as other

avenues for customer service.7. Marketplaces will provide and grant individual mandate exemptions.



The Marketplace

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Provide assistance &

customer service

Help eligible individuals get

federal tax credits & subsidies

Inform consumers about

individual mandate exemptions

Determine eligibility for a QHP, Medicaid, CHIP & enroll if

eligible

PublicMarketplaces

Execute Risk Mitigation Programs

Run websites that allow consumers to shop for qualified

health plans Help consumers and

employers choose & enroll

in coverage

1 2

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4

5

6

Functions Summary


The Marketplace Models

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Federally Facilitated Marketplace (FFM)If a state does not submit a blueprint to HHS, or if HHS finds the state is not exchange-ready, HHS will operate a FEDERALLY FACILITATED model for that state. A state can apply to take back operation of the Marketplace in the future.

State Partnership Marketplace (SPM)A state may decide to implement a Marketplace operated by both the state and HHS, also called a STATE PARTNERSHIP model where the state and federal government work together to operate its different functions.

State-based Marketplace (SBM)A state may choose to establish and operate its Marketplace, which is called a STATE-BASED model.

Other Options• A state may combine individual and Small Business Health Options Program

or maintain them separately. • A state may develop multiple Marketplaces, if each serves a distinct area.


Enrollment Periods


Marketplace Enrollment for Individuals

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2014 Enrollment Type Enrollment Period

Open Enrollment

October 1, 2013 to March 31, 2014

Initial open enrollment: Coverage effective date:

Oct. 1 – Dec. 15 Jan. 1

Dec. 16 – Jan. 15 Feb. 1

Jan. 16 – Feb. 15 March 1

Feb. 16 – March 15 April 1

March 16 – March 31 May 1

Special Enrollment(see next page)

60 days after triggering event (individual market)30 days after triggering event (small group market)

Limited Open Enrollment 30 days prior to policy end if policy is on non-calendar year


Marketplace Enrollment for Individuals

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Triggering EventsAn individual can use the Special Enrollment if an individual:� Loses his/her minimum essential coverage due to events such as

� death of policy/contract holder;� policy/contract holder loses employer-based coverage;� loss of coverage from divorce or separation; or� loss of Medicaid or Children’s Health Insurance Program eligibility.

� Gains or becomes a dependent (marriage, birth, adoption)� Gains citizenship or lawfully present status� Becomes eligible or ineligible for premium tax credits or cost-sharing reductions� Has access to new qualified health plans due to a permanent move� Is unintentionally or mistakenly enrolled due to an error of an officer, employee,

or agent of the Marketplace or of HHS� Proves that the plan in which he/she is enrolled violated its policy/contract


Essential Health Benefits



Essential Health Benefits (EHBs) are generally services and items in the following 10 benefit categories:

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Ambulatory patient services

Emergency services

Hospitalization Maternity and newborn care

Mental health, substance abuse disorder services,

behavioral health treatment

Prescription drugs

Habilitative and rehabilitative services and

devices

Laboratory services

Preventive and wellness services and chronic disease management

Pediatric services, including oral and

vision care

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4848

� In 2014, plans sold on and off the Marketplace must include essential health benefits (EHBs)

� These plans cannot place annual dollar limits or lifetime dollar limits on EHB services

� We have removed both annual dollar limits and lifetime dollar limits on EHBs for fully insured group plans

� While we can set up restricted annual limits for self-insured plans upon request, we suggest following our standard approach

� The minimum package of items and services that must be covered by these plans is generally defined by each state’s EHB benchmark plan



Benchmark Plans

EHBs and Benchmark Plans• A benchmark plan serves as a state’s reference health

plan of essential health benefits (EHBs).• Each state had to select a health insurance plan currently operating

within the state to act as the benchmark plan.• States had to select a single benchmark plan. • If state’s benchmark plan did not cover services

and items in all 10 EHB categories, the benchmark plan had to be supplemented by services and items from other benchmark plan options.

Default Benchmark• If a state did not select a benchmark, then the

EHB benchmark defaulted to the largest (by enrollment) small-group plan in the state.

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ark



Preventive Services


• Requires health plans provide certain preventive health services without cost sharing – there is no copay, coinsurance or deductible – when using a network provider

• Preventive services include coverage pertaining to women, such as contraceptives, pap smears and mammograms. Only non-grandfathered individual and small group plans will have to cover maternity care.

• Plans have some leeway in outlining the frequency, treatment and setting for these services. That means coverage details and limits may vary from plan to plan.

• Some companies offer preventive services in addition to those required by the Affordable Care Act. In those cases, members may be asked to pay all or part of the cost of these preventive services.

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Preventive Services

INDNGF as well as:SMLNGF LGFNGFLGSNGF


Preventive Services

SERVICES FOR CHILDREN EXAMPLES

Well-child exams History and physical exam, hearing screening, vision acuity test,developmental & behavioral assessments

Immunizations Measles, mumps, rubella , varicella (chickenpox), influenza (flu) Screening tests Screening for STIs, obesity screening, lead screening, tuberculin testing Preventive treatments Gonorrhea preventive medication for eyes of all newbornsSERVICES FOR ADULTS EXAMPLESYearly preventive visit Wellness visits, including height, weight and body mass index (BMI)Immunizations Hepatitis A and B, influenza (flu), tetanus, diphtheria, pertussisGeneral screening tests Blood pressure, cholesterol, depression, diabetes, obesityCancer screenings Colorectal cancerHealth counseling Alcohol misuse, obesity, tobaccoMen only Abdominal aortic aneurysm screening

Women only Well woman visit, screening mammography , cervical cancer screening with pap smear, osteoporosis screening, prescription contraceptives

Pregnant women only Screenings for anemia, bacteriuria, Rh incompatibility, gestational diabetes

In-network preventive services are covered at 100%, and the insurer pays the provider. This is an example list only.


Qualified Health Plans



� A qualified health plan (QHP) is a health insurance plan that has been certified to be allowed for purchase on an individual Marketplace and SHOP.

� QHPs will be sold and administered by private companies.

� Every QHP will cover a core set of benefits outlined in the state’s essential health benefits (EHBs) benchmark plan.

� HHS established the criteria for how to certify a QHP. Several things must happen. The product must:• Get certified by each Marketplace in which it is sold• Provide essential health benefits that meet state and federal

guidelines• Follow established limits on cost sharing (such as deductibles

and copayments)• Meet provider network adequacy rules

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Carrier Requirements for Offering Marketplace Products

In order for a health benefit plan to qualify for sale on the Marketplace, a company or carrier offering that plan must:• Maintain licensing and good standing in the state in which the issuer

offers health insurance coverage• Charge the same premium rate for each qualified health plan (QHP) of

the issuer whether the plan is offered through the Marketplace, directly from the issuer or through an agent

• Comply with the regulations that apply to Marketplaces, and any other requirements that an applicable Marketplace may establish

• Agree to offer at least one Silver QHP and one Gold QHP plan on the Marketplace

• Maintain contracts with essential community providers and ensure sufficient provider choice

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Carrier Requirements for Offering Marketplace Products

In order for a health benefit plan to qualify for sale on the Marketplace, a company or carrier offering that plan must (continued):• Maintain accreditation based on quality and performance• Use a uniform enrollment form• Use a standard format to present plan information• Provide information on quality standards used to measure product

performance and report on the following: claims payment policies, enrollment/disenrollment, amount of claims denied, cost-sharing requirements, out-of-network policies and enrollee rights

• Implement a quality improvement strategy• Meet certain marketing requirements

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Metallic Plans &Actuarial Value


Metallic Plans & Actuarial Value

58

Starting in 2014, health plans offered through the individual Marketplace and SHOP must fit within four metallic levels of coverage that correspond to plan actuarial value (AV).

These four types of metallic plans are: Bronze, Silver, Gold and Platinum.

� All metallic plans offered in a state must cover at minimum, the package of essential health benefits (EHBs) set by that state’s benchmark plan.

� Each metal level corresponds to an AV, which is the expected percentage of medical expenses shared between the health plan and the member.

� For example, a Gold plan with an actuarial value of 80% means that the plan will, on average, pay 80% of health care expenses across the population of members, and members will pay the remaining 20% via deductibles, copayments and other cost sharing.




Platinum

Gold

Silver

Bronze

Expected Percentage of Medical Expenses Covered by the Health Plan

Expected Percentage of Medical Expenses Covered by the Member

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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The key difference between “metallic” plans is the expected percentage of medical expenses shared between the health plan and the member.



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These metal coverage levels are meant to:� Make it easier for consumers to compare plans with similar levels of

coverage and make informed choices about health plans. � Help consumers navigate choices and associate cost vs. value. � Set the minimum amount of coverage needed to fulfill the minimum

coverage requirement (individual mandate) and avoid paying penalties.� Standardize levels of health insurance in the individual and small group

market for both on and off the Marketplace.

* Payment responsibilities don’t include premium payments. These numbers represent an approximate percentage of payment responsibility for covered benefits.

Metallic Level Insurer Pays* Member Pays*BRONZE: 60% 40%

SILVER: 70% 30%

GOLD: 80% 20%

PLATINUM: 90% 10%


Catastrophic Plans: a ‘Fifth’ Plan Value LevelThere is another plan option available for some individuals: the catastrophic plan.

Catastrophic plans will have lower premiums to protect against high out-of-pocket costs and cover recommended preventive services without cost sharing—providing affordable individual coverage options for young adults and people for whom coverage would otherwise be unaffordable.

Consumers cannot use premium tax credits for catastrophic plans.

Who is eligible?� Those under the age of 30� Those who can’t afford coverage and receive

hardship exemptions from the Marketplace

Catastrophic Plans

61

r young adults

able.

plans.

:INDNGF


Qualified health plans offered on the Marketplace at all metal levels of coverage are also available to a child as a child-only policy.

Who is eligible?

Children are those who have not attained the age of 21 at the beginning of the plan year, but note that a taxpayer cannot include children aged 19 through 20 when determining the taxpayer's premium tax credit eligibility, unless the 19- or 20-year-old fits the criteria for tax-dependent status (for example, the child is a student)

Coverage for Children

62


The Federal Poverty Leveland ACA


The Federal Poverty Level and ACA

The Federal Poverty Level (FPL)FPL amounts are set gross income minimums that HHS determines an individual or a family needs to live. FPL amounts vary each year and are adjusted for inflation.

FPL figures prominently into ACA and eligibility via the Marketplace for:• Enrolling in public programs such as Children's Health Insurance Program

and Medicaid (planned for Federally Facilitated Marketplace and State Partnership Marketplace)

• Attaining exemption status from purchasing health insurance to avoid a federal tax penalty

• Receiving premium tax credits and qualifying for cost-sharing subsidies for a Marketplace plan

Poverty guidelines are released at the beginning of each year. FPL amounts for 2014 are likely to be released in January or February of 2014.

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FPL and ACA• Those up to 138% of FPL may be eligible for Medicaid in states that

have accepted Medicaid expansion• Those between 100-400% of FPL may be eligible to receive premium

tax credit assistance for health insurance premium payments• Those between 100-400% of FPL may be eligible to receive a type of

cost-sharing subsidy that reduces out-of-pocket maximums (for Silver plans)

• Those between 100-250% of FPL are eligible to receive a type of cost-sharing subsidy that upgrades eligible consumers to a plan with a high actuarial value (for Silver plans)

65

et



The household income range of interest for those purchasing Marketplace plans are 100-400% of FPL. Those with household incomes of 100-400% of FPL may be eligible to receive premium tax credits and cost-sharing subsidies. A family of four with a household income of $94,200 or less may be eligible to receive assistance.

2013 poverty guidelines for 48 contiguous states and the District of Columbia

Federal Poverty Levels Table

Size of Family

100%of FPL

150%of FPL

200%of FPL

250%of FPL

300%of FPL

400%of FPL

1 $11,490 $17,235 $22,980 $28,725 $34,470 $45,960

2 $15,510 $23,265 $31,020 $38,775 $46,530 $62,040

3 $19,530 $29,295 $39,060 $48,825 $58,590 $78,120

4 $23,550 $35,325 $47,100 $58,875 $70,650 $94,200

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Premium Tax Creditsfor Individuals


Premium Tax Credits

Defined A premium tax credit is available based on a household income of 100-400% of the federal poverty level (FPL). The tax credit can be applied to any metallic-level Marketplace plan at any metallic level.

The premium tax credit helps pay for monthly health insurance premiums.

Though the premium tax credit is applied with a federal tax return, it can be advanced to the individual upon enrollment in a Marketplace plan, and it will be based on the individual’s income the previous year. The premium tax credit can be applied to a plan at any metallic level: Bronze, Silver, Gold and Platinum.

Note that premium tax credits are on a sliding scale. For example, while those at 150% of FPL might receive tax credits that pay for most of their premiums, those near 400% of FPL likely will not.

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INDNGF


Premium Tax Credits

Rules• Available for eligible individuals who

purchase individual coverage on the Marketplaces, with household incomes between 100-400% of the FPL

• Applied to the health insurance PREMIUM payments of a plan at any metallic level

• Can be advanced to the consumer upon enrollment in a Marketplace plan

• Based on the consumer’s income the previous year

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INDNGF


Individuals: Premium Tax Credits

EligibilityTo be eligible for a premium tax credit, an individual must:1. Be a U.S. citizen or legal resident2. Have household income between 100-400% of the

federal poverty level3. Be enrolled in a Marketplace plan4. Be included in tax filings to the IRS as an individual,

or as a member of a married couple or family with dependents

5. Not be eligible for other affordable coverage, such as Medicaid, Medicare Part A or other types of minimum essential coverage (other than through the individual Health Insurance Marketplace)

6. Not have access to an employer plan that meets minimum essential coverage and is affordable and meets minimum value

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Individuals: Premium Tax Credits

How Advanced Premium Tax Credits Work• A Marketplace determines premium tax credit eligibility for

individuals enrolling in a Marketplace qualified health plan (QHP) and seeking financial help based on income and other requirements.

• Advanced payments are made periodically to the issuer of the QHP in which the individual enrolls.

• The amount of the premium tax credit is based on the individual’s prior year’s income tax returns.

• These amounts are reconciled in the next year when individuals file a tax return.• The enrollee is billed the difference between the full premium and the premium

tax credit.• If a person who is filing taxes has a change in income, and the filer should have

received a higher tax credit, the additional credit would be included in the tax refund for the year.

• Conversely, any excess amount that was overpaid in premium credits would have to be repaid to the federal government as a tax payment.

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Cost-sharing Subsidyfor Individuals


Cost-sharing Subsidy

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Defined• A cost-sharing subsidy reduces the out-of-pocket costs

(deductibles, coinsurance and/or copayments) at the point of service for eligible individuals.

• It is designed to help eligible consumers at lower incomes by automatically enrolling them in health plans with higher actuarial values.

Eligibility• Has a household income of 100-250% of the federal

poverty level, based on the consumer’s income the previous year

• Is enrolled in a Silver Marketplace plan• Does not have access to other forms of minimum

essential coverage such as an employer plan

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Cost-sharing Subsidy

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Household Income

Plan OriginalCost Share

Member OriginalCost Share

Plan NEW Cost Share

Member NEW Cost Share

200-250% of FPL 70% 30% 73% 27%

150-200% of FPL 70% 30% 87% 13%

100-150% of FPL 70% 30% 94% 6%

Cost-sharing Subsidy Plan Variations

The subsidy is a financial exchange between the federal government and the health plan. Members are not part of the financial exchange. They will see the higher value of their plan when they qualify.

When coupled with a premium tax credit, members receive assistance with their premium payments as well as their out-of-pocket costs.

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Cost-sharing Subsidy: AV Upgrade

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How It Works Behind the Scenes1. Issuer/carrier submits to a state Marketplace for approval a standard

Silver health insurance plan. It includes three plan variations to meet the statute’s three levels of cost-sharing reductions. The plan receives qualified health plan certification.

2. An individual earning 187% of FPL applies for a Silver health plan.3. The state Marketplace requests an individual's income eligibility from the U.S. Treasury.4. Treasury determines employer does not provide affordable coverage. The individual is

allowed to purchase the Silver plan on the individual Marketplace.5. A cost-sharing subsidy is available since the individual selected a Silver plan (with an

actuarial value of 70%) and has an income at 187% of FPL. The individual is bumped up to a variation of the plan with a new actuarial value of 87%.

6. The individual receives care for a covered Essential Health Benefit. On average, the plan pays the 87% of benefits and the member pays approximately 13% in deductibles, coinsurance and/or copays.

7. The U.S. Treasury sends advanced payments directly to the issuer of the health plan in the amount estimated to cover the cost-sharing reductions associated with the specific Silver plan variation.

8. After the end of the calendar year, the federal government would reconcile the payments.

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Patient-Centered Outcomes Research Institute Fee (PCORI)


PCORI Fee

• Fee amount is $1 times the average number of covered lives for plan/policy years ending before 10/01/2013.

• Fee amount is $2 times the average number of covered lives for plan/policy years ending on or after 10/01/2013, subject to adjustments that include the projected increases in National Health Expenditures.

• Fee terminates for plan/policy years ending after 09/30/2019.

Generally, the fee will apply to policy years ending on or after Oct. 1, 2012, and before Oct. 1, 2019.

As part of ACA, health insurance issuers and sponsors of self-insured group health plans will be assessed an annual fee – based on the average number of covered lives – to fund patient-centered outcomes research.




PCORI Fee

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1. The IRS did not adopt recommendations that would prevent double counting individuals with coverage under a group health plan through two separate insurance policies (e.g., a single insurer provides separate policies for in-network and for out-of-network services).

2. Sponsor of a group health plan that provides both insured & self-funded coverage can exclude individuals with the insured coverage when reporting the number of covered lives subject to the PCORI fee.

3. Fee does not apply to employee assistance, disease management or wellness programs as long as they do not provide significant medical care or treatment.

4. Fee is applicable to retiree coverage, COBRA coverage and similar state or federal continuation coverage.

5. Special rules for number of lives calculation in the first and last years the fee is in effect.

6. Fee does not permit third-party reporting or payment of the PCORI fee.


Risk Mitigation (3Rs)


Risk Mitigation Overview

Risk Mitigation ProgramsIn 2014, three risk mitigation programs go into effect. Together they are often referred to as the 3Rs. They are designed to stabilize premiums in the market when reforms have taken place.

1. Risk Corridors (temporary)2. Reinsurance (temporary)3. Risk Adjustment (permanent)

1. Risk CorridorsRisk corridors are designed to lessen the pricing risks insurers face when data for potential enrollees is limited. This program will provide a government subsidy if an insurer incurs losses over a certain limit. And if an insurer’s gains reach a certain limit, the insurer will pay the government.


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2. ReinsuranceReinsurance is a temporary program that will be in effect during the first three years of the Affordable Care Act’s insurance market reforms (2014-2016).

Reinsurance

Helps fund temporary reinsurance programs (established under ACA) that would operate in each state from 2014 through 2016.

Purpose

The Reinsurance Fee is assessed on health insurers and plan sponsors for self-funded plans. This includes grandfathered and non-grandfathered plans.

Impact

The Reinsurance Fee is $5.25 per month per enrolled, covered life in 2014. States may require additional reinsurance fees.




All health insurance issuers will calculate the risk of their membership using a model provided by the government. States that run their own Marketplace can choose to also run risk adjustment; otherwise the federal government will operate it.

The risk adjustment calculation will result in payments between issuers:insurers with lower than average risk will pay insurers with higher than average risk. Risk adjustment applies to the individual and small group markets, on and off the Marketplace, for non-grandfathered plans.

3. Risk Adjustment Risk Adjustment is a permanent program that applies to the individual and small group insured markets.

Risk Adjustment


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Health Insurer Fee


• Beginning in 2014, health insurers will be assessed an annual fee based on the value of health insurance premiums paid in the previous year.

• Exemptions exist for Medicare supplement plans, self-funded groups, long term care and others.

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YEAR FEE

2014 $8 billion

2015 $11.3 billion

2016 $11.3 billion

2017 $13.9 billion

2018* $14.3 billion

Total through 2020 $87 billion*Aggregate insurer fees will increase by an indexed amount each year after 2018.

Health Insurer Fee


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• Starting in 2014, the Affordable Care Act will impose a fee on health insurers, called the Health Insurer Fee (sometimes referred to as the Premium Tax), that will apply to U.S. health insurance issuers.

• After 2018, the insurance fee is equal to the amount of the fee in the preceding year increased by the rate of the insurer's premium growth.

• Each insurer will be liable for a share of the aggregate fee based on annual net premiums. Companies with a greater market share will be liable for a greater share of the fee. Insurers will pay the fee directly to the Treasury. The fees are not deductible for income tax purposes.

• Some groups are exempt: Medicare, self-funded groups, long term care and others.

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Health Insurer Fee


Medical Loss Ratio


Medical Loss Ratio (MLR)

� Medical Loss Ratio (MLR) is the percentage of insurance premium dollars spent on reimbursement for clinical services or medical expenses and activities to improve health care quality.

� ACA provisions set MLR standards for different markets, as do some state laws. • The federal MLR standards for small groups and individuals are 80%• The federal MLR standard for large groups is 85%

� If a health insurer does not meet or exceed the MLR standard, the insurer may have to issue rebates to enrollees. Rebates may include canceled accounts, active during the MLR reporting year for which rebates are owed.




American Indians &Alaskan Natives


American Indians, Alaskan Natives

The Affordable Care Act affects American Indians and Alaskan Natives in these ways:1. More choices for health care coverage

• Individuals can use services offered through the Indian Health Services (IHS), tribally operated health systems and Urban Indian Health facilities.

• Individuals can purchase coverage via the Marketplace.• Individuals can enroll for coverage via employer’s health insurance.• Individuals can access coverage through other sources such as Medicare,

Medicaid, and the Children’s Health Insurance Program if eligible.• Tribes and small businesses can purchase insurance for their employees or

their members via the Small Business Health Options Program.

2. Value of health services cannot be taxed: The value of health services and benefits from IHS-funded health programs or Tribes will be excluded from an individual’s gross income so it cannot be taxed.


American Indians, Alaskan Natives

3. No Penalty: The Affordable Care Act (ACA) requires most Americans and legal immigrants to have health insurance or face a tax penalty, but American Indians and Alaskan Natives eligible to receive services through IHS may not have to meet this requirement and would not be fined for not having coverage.

4. If household income does not exceed 300% of FPL, roughly $70,650 for a family of four ($88,320 in Alaska) in 2013 – American Indians and Alaskan Natives may not have to pay any cost sharing for certain services, regardless of where service was obtained.

5. If household income is greater than 300% of FPL, American Indians and Alaskan Natives may not have to pay cost-sharing for certain services received at an Indian Health Services facility, tribal organization, or urban Indian organization provider, or through referral under contract health services.

6. Indian Health Care Improvement Act Permanent: Through the passage of ACA, the Indian Health Care Improvement Act is reauthorized and permanent.


Legal Immigrants


Legal Immigrants

• In 2014, lawfully present immigrants may choose to purchase coverage on a Health Insurance Marketplace

• Legally present immigrants are those who have applied for either a permanent or temporary visa and have been granted authorization to live and/or work in the United States

• Those not lawfully present are not eligible for premium tax credits or cost-sharing subsidies


Medicare, Medicaid & CHIP


The Affordable Care Act affects Medicare recipients. Most Medicare changes impact organizations – not individuals – though a few do.• Medicare members now have preventive

care without cost sharing. Preventive services may include flu shots, mammogram screenings and annual doctor wellness visits.

• The gap in Medicare prescription drug coverage will slowly close under the law. The “donut hole” for Medicare prescription drug coverage will be eliminated by 2020 – lowering costs and reducing out-of-pocket costs.

• For Medicare, there’s a freeze on income-related Part B premiums until 2019.

• The subsidy for Medicare Part D premiums are reduced for those with incomes above $85,000 for an individual and $170,000 for a couple.

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Medicare Recipients


Beginning in 2014 • Sometimes called Medicare Part C, Medicare Advantage plans do

not offer supplemental coverage. They are a private insurance alternative to Original Medicare (Parts A & B), and they must spend no less than 85% of premium on medical services.

• ACA reduces payments to Medicare Advantage plans; revised payments will be phased in over several years.

• Beginning in 2014, Medicare Advantage plans receive bonus payments based on 2011 quality ratings from CMS. These payments are meant to create incentives for quality improvements and to encourage beneficiaries to shift to highly-rated plans.

• The bonus payments essentially redistribute some of these savings to Medicare Advantage plans that qualify for quality-based bonus payments.

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Medicare Advantage


Medicaid and CHIP

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� ACA expanded Medicaid to all individuals under 65 whose annual income is below 138% of FPL. (Though ACA states this limit is 133% of FPL, the CMS disregards the first 5% of income, raising the effective limit to 138% of FPL.) The federal government would cover 100% of the costs of “expansion” in 2014, with annual reductions each subsequent year.

� In 2012, the Supreme Court ruled that Medicaid expansion is voluntary by state. Each state must choose whether to implement the expansion.

� In states that accept Medicaid expansion, Medicaid and the Children’s Health Insurance Program will provide coverage for low-income adults and children, with the Marketplace serving individuals with slightly higher incomes.


Medicaid and CHIP Eligibility & Enrollment� Eligibility rules for all three programs – Medicaid, the Children’s Health

Insurance Program (CHIP) and Marketplace plans – will be aligned and enrollment in all three types of coverage will use a single, unified application.

� Eligibility verification procedures rely mostly on electronic data sources.� States have flexibility to determine the usefulness of available data

before requesting additional information from applicants.� New verification process for states includes the operation of a federal

data services “Hub” that will link states with federal data sources.� New process limits renewals to once every 12 months unless the

individual reports a change or new data prompts eligibility assessment.� Those states that previously covered children through CHIP will

continue to receive the enhanced CHIP matching rate.

Medicaid and CHIP

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The Marketplace:Privacy & Security Standards


Creation, collection, use and disclosure:1. Where the Marketplace creates or collects personally identifiable information for the purposes of

determining eligibility for enrollment in a qualified health plan; determining eligibility for other insurance affordability programs, or determining eligibility for exemptions from the individual responsibility provisions, the Marketplace may only use or disclose such personally identifiable information to the extent such information is necessary to carry out Marketplace functions.

2. The Marketplace may not create, collect, use, or disclose personally identifiable information while the Marketplace is fulfilling its responsibilities.

3. The Marketplace must establish and implement privacy and security standards that are consistent with the following principles:

(i) Individual access. Individuals should be provided with a simple and timely means to access and obtain their personally identifiable information in a readable form and format.

(ii) Correction. Individuals should be provided with a timely means to dispute the accuracy or integrity of their personally identifiable information and to have erroneous information corrected or to have a dispute documented.

(iii) Openness and transparency. There should be openness and transparency about policies, procedures, and technologies that directly affect individuals and/or their personally identifiable information.

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3. The Marketplace must establish and implement privacy and security standards that are consistent with the following principles (continued):

(iv) Individual choice. Individuals should be provided a reasonable opportunity and capability to make informed decisions about the collection, use, and disclosure of their personally identifiable information.

(v) Collection, use, and disclosure limitations. Personally identifiable information should be created, collected, used, and/or disclosed only to the extent necessary to accomplish a specified purpose(s).

(vi) Data quality and integrity. Persons and entities should take reasonable steps to ensure that personally identifiable information is complete, accurate, and up-to-date.

(vii) Safeguards. Personally identifiable information should be protected with reasonable operational, administrative, technical, and physical safeguards to ensure its confidentiality, integrity, and availability and to prevent unauthorized or inappropriate access, use, or disclosure.

(viii) Accountability. These principles should be implemented, and adherence assured, through appropriate monitoring and methods should be in place to report and mitigate non-adherence.

Privacy Standards – Continued

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4. The Marketplace must establish and implement operational, technical, administrative and physical safeguards that are consistent with any applicable laws (including this section) to ensure the following:

(i) The confidentiality, integrity, and availability of personally identifiable information created, collected, used, and/or disclosed by the Marketplace.

(ii) Personally identifiable information is only used by those authorized to receive or view it.

(iii) Returns and return information is kept confidential under US Code 6103, “Confidentiality and disclosure of [tax] returns and return information.”

(iv) Personally identifiable information is protected against any reasonably anticipated threats or hazards to the confidentiality, integrity, and availability of such information.

(v) Personally identifiable information is protected against any reasonably anticipated uses or disclosures of such information that are not permitted or required by law.

(vi) Personally identifiable information is securely destroyed or disposed of in an appropriate and reasonable manner and in accordance with retention schedules.

5. The Marketplace must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.

6. The Marketplace must develop and utilize secure electronic interfaces when sharing personally identifiable information electronically.


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Application to non-Marketplace entitiesExcept for tax return information, which is governed by US Code 6103, “Confidentiality and disclosure of [tax] returns and return information,” a Marketplace must require at minimum the same privacy and security standards as a condition of contract or agreement with individuals or entities, such as agents and brokers.

Workforce complianceThe Marketplace must ensure its workforce complies with the policies and procedures developed and implemented by the Marketplace to comply with this section.

Written policies and proceduresPolicies and procedures regarding the creation collection, use, and disclosure of personally identifiable information must, at minimum:

1. Be in writing, and available to the secretary of HHS upon request

2. Identify applicable law governing collection, use, and disclosure of personally identifiable information


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Data sharingData matching and sharing that facilitate sharing of personally identifiable information between the Marketplace and agencies administering Medicaid and the Children’s Health Insurance Program must:

1. Meet any applicable requirements

2. Meet applicable requirements described in section “Streamlining of Procedures for Enrollment through a Marketplace and State Medicaid, CHIP, and Health Subsidy Programs” of the Affordable Care Act

3. Be equal to or more stringent than the requirements for Medicaid

Compliance with the CodeReturn information must be kept confidential and disclosed, used, and maintained only in accordance with section 6103 of the Code.

Improper use and disclosure of information. Any person who knowingly and willfully uses or discloses information in violation of section 1411g, “Procedures For Determining Eligibility For Exchange Participation, Premium Tax Credits And Reduced Cost-sharing, and Individual Responsibility Exemptions” of the Affordable Care Act will be subject to a civil penalty of not more than $25,000 per person or entity, per use or disclosure


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Training Affirmation Form


Affirmation Form: Completed Training

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Thank you for completing the Marketplace Matters: Producer Prep Program training.

Please continue the Marketplace Matters program by completing the Marketplace Matters: Product and Pricingtraining.

In order to receive credit for your training, you must complete and submit the correct BCBSIL Training Affirmation form.

Complete the Option A Training Affirmation Form if you will sell both Marketplace and Non-Marketplace plans.

Complete the Options B Training Affirmation Form if you will sell only Non-Marketplace plans.

Documents

Marketplace Matters: Producer Prep Program · Health Insurance Mandate: Overview Overview Minimum Coverage Requirement Beginning in 2014, most U.S. citizens and legal residents must